IMCO commitment includes US$100M allocation to Ares Pathfinder Fund for opportunistic exposure to growing alternative credit segment

TORONTO (May 18, 2021) – The Investment Management Corporation of Ontario (“IMCO”) has closed its commitment with a new strategic partner, Ares Management Corporation (“Ares”) (NYSE: ARES). IMCO’s US$500-million commitment to Ares (the “Fund”) will provide its Global Credit asset class timely access to an actively managed, diversified multi-strategy credit portfolio. IMCO has allocated US$400 million of its US$500-million to a Fund of One structure and US$100-million to Ares Pathfinder Fund, L.P. (together with its parallel vehicles, “Pathfinder”), a flagship global alternative credit fund. Pathfinder pursues a differentiated strategy of providing tailored financial solutions for owners of large, diversified portfolios of assets that generate predictable and contractual cash flows throughout market cycles.

“Ares’ 20-plus year track record, depth and breadth of capabilities and expertise across asset classes represents the kind of strategic partner we want as we grow our Global Credit portfolio,” said Jennifer Hartviksen, Managing Director, Global Credit, IMCO. “IMCO’s strategic partnership with Ares is well-aligned with our diversification strategy and enables our clients to gain global access to a wide spectrum of credit products and markets—both liquid and illiquid, public and private.”

Ares is a leading global alternative investment manager operating integrated groups across Credit, Private Equity, Real Estate and Strategic Initiatives. With approximately 1,100 institutional investors, Ares manages capital for a variety of pension funds, sovereign wealth funds, university endowments, charitable foundations, financial institutions, and family offices. Pathfinder invests in alternative credit assets that are often sourced in the financing gaps found between the credit, private equity and real estate sectors.

“We are very excited to partner with IMCO and leverage our credit market leadership position to manage this strategic mandate,” said Michael Arougheti, Chief Executive Officer and President of Ares. “We designed this customized solution together with the goal of capitalizing on our all-weather approach to take advantage of opportunistic dislocations and market inefficiencies. We believe that this will provide IMCO with the flexibility to achieve their clients’ risk-reward objectives across both public and private markets.”

“The COVID-19 pandemic has exposed financing gaps in public credit segments for hard hit sectors seeking to address long-term solvency challenges,” added Hartviksen. “IMCO’s US$400-million commitment to the Fund of One, and our US$100-million commitment to Pathfinder positions us well to quickly respond to the demand for more bespoke capital solutions created by the current market and economic environment.”

Created as a separate asset class in 2020, IMCO’s Global Credit portfolio invests across a range of public and private credit market segments including corporate, real estate, infrastructure, emerging markets, structured and IP royalties to generate higher risk-adjusted returns than traditional fixed income and additional diversification benefits to a total portfolio for Ontario public sector fund clients. The Global Credit team is differentiated by its cross-functional expertise, and clients and partners benefit from close internal coordination among IMCO’s public equities and private equity teams. As of December 31, 2020, IMCO’s Global Credit portfolio had CAD$4.6-billion AUM. The portfolio is expected to grow to CAD$8-billion or more by 2025.