Ares Plans a Smaller Private Credit Fund With Less Leverage (1)

Ares Management Corp. is planning a significantly smaller flagship US direct lending fund than its previous record-breaking vehicle of $33.6 billion to speed up the deployment of capital amid broader dislocations in private markets.

The Los Angeles-based firm, one of the world’s biggest private credit managers, is sounding out investors about the planned fund ahead of a formal launch sometime in the summer, according to people familiar with the matter who asked not to be identified discussing confidential talks.

Anticipating using significantly less leverage, as well as having fewer equity commitments, the preliminary total target size is expected to be ...