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Ares Capitala?s Portfolio Company Ivy Hill Enhances Asset Management Platform with Acquisition of Senior Debt Fund

^{Published on 2010-01-07 16:45:11 - Market Wire}
 

NEW YORK--([ BUSINESS WIRE ])--Ares Capital Corporation (NASDAQ: ARCC) announced today that it made an incremental investment during December 2009 in its portfolio company, Ivy Hill Asset Management L.P., referred to as Ivy Hill, to facilitate its acquisition of Allied Capital Corporation's interests in the Allied Capital Senior Debt Fund, L.P. and related vehicles (together, the "SD Fund") for approximately $33 million in cash. Ivy Hill will also manage the SD Fund which has been renamed the Ivy Hill Senior Debt Fund, L.P.

"We believe the market research and information that we gain through Ivy Hill's management of middle market loan funds provides significant competitive advantages for Ares Capital in connection with its underwriting and origination activities"

The SD Fund currently has approximately $294 million of committed capital invested primarily in first lien loans and to a lesser extent, second lien loans of middle-market companies. Ivy Hill will receive fee income for managing the SD Fund and potential equity distributions in respect of interests that it acquired in the SD Fund.

"This transaction further strengthens the Ivy Hill platform and is consistent with Ares Capital's growth strategy for Ivy Hill," commented Mitchell Goldstein, Partner of Ares Capital Management. "Ivy Hill's management of the SD Fund is expected to enhance Ivy Hill's fee income, bolster its market knowledge and provide potential attractive investment opportunities for both Ares Capital and Ivy Hill."

The transaction increases Ivy Hill's total committed capital under management to over $2.5 billion across 240 companies and increases Ares Capital's total committed capital under management, to over $8.0 billion¹ across more than 290 companies.

"We believe the market research and information that we gain through Ivy Hill's management of middle market loan funds provides significant competitive advantages for Ares Capital in connection with its underwriting and origination activities," said Michael Arougheti, President of Ares Capital. "We hope to continue to leverage the many benefits of Ivy Hill for our clients and our shareholders."

¹ Includes $1.2 billion of available debt capacity as of September 30, 2009. With certain limited exceptions, Ares Capital is only allowed to borrow amounts such that its asset coverage (as defined in the Investment Company Act of 1940) equals at least 200% after such borrowing. Also includes $3.0 billion of funds attributable to the Senior Secured Loan Fund LLC which was acquired on October 30, 2009 and is co-managed by GE Commercial Finance Investment Advisory Services LLC.

About Ares Capital Corporation

Ares Capital Corporation is a specialty finance company that provides integrated debt and equity financing solutions to U.S. middle-market companies. Ares Capital Corporation invests primarily in first- and second-lien loans and mezzanine debt, which in some cases includes an equity component. To a lesser extent, Ares Capital Corporation also makes equity investments. Ares Capital Corporation is externally managed by Ares Capital Management LLC, an affiliate of Ares Management LLC, an SEC registered investment advisor and alternative asset investment management firm with approximately $30.0 billion of committed capital under management as of September 30, 2009. Ares Capital Corporation is a closed-end, non-diversified management investment company that has elected to be regulated as a Business Development Company under the Investment Company Act of 1940. For additional information, please visit our website at [ www.arescapitalcorp.com ].

About Ivy Hill Asset Management L.P.

As a wholly owned portfolio company of Ares Capital, Ivy Hill Asset Management L.P., referred to as Ivy Hill, was established to capitalize on the attractive asset management opportunities with middle market companies. Ivy Hill generates asset management fee income by managing middle market senior debt funds primarily for third party investors. Ivy Hill manages two unconsolidated senior debt funds, Ivy Hill Middle Market Credit Fund, Ltd. and Ivy Hill Middle Market Credit Fund II, Ltd. (together the "Ivy Hill Funds") and serves as the sub-advisor or sub-manager for four other unconsolidated senior debt funds, including three CLOs managed by affiliates of Wells Fargo & Co. As of September 30, 2009, Ivy Hill had total committed capital under management of over $2.0 billion, and pro forma for the acquisition of the SD Fund had committed capital under management of over $2.5 billion.

FORWARD-LOOKING STATEMENTS

Statements included herein may constitute "forward-looking statements," which relate to future events or our future performance or financial condition. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results and condition may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Ares Capital Corporation's filings with the Securities and Exchange Commission. Ares Capital Corporation undertakes no duty to update any forward-looking statements made herein.