Ares Management has acquired the entirety of BlueCove, after taking a minority stake in the London-based systematic fixed income manager in 2023.

BlueCove, which currently manages $5.5bn (£4.1bn) in assets, invests across high-yield and investment-grade corporate bonds, convertible bonds, and other liquid credit instruments. Through the acquisition, BlueCove will become part of Ares’ systematic credit strategy.

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Alternatives manager Ares, which oversees $377.1bn of credit assets, did not disclose the financial terms of the deal.

“In recent years, we have seen increased interest in systematic credit investment products and capabilities from global investors as they seek to diversify their portfolios and capture the opportunities presented by the quantitative credit investment revolution,” said Kipp deVeer, co-president of Ares. “This demand, paired with a broader structural shift towards systematic fixed income trading to achieve alpha, underlies the latest expansion of our market-leading credit group.”

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Ares systematic credit will be led by BlueCove’s chief executive officer, Alex Khein, supported by a team of approximately 60 professionals. BlueCove’s executive chairman, Hugh Willis, will serve as a senior advisor to the organisation.

“This transaction is a testament to our shared culture of innovation, entrepreneurship and collaboration that has underpinned the relationship since the beginning,” said Khein.

“Our strategy in first partnering with Ares in 2023 through a minority equity stake was to accelerate BlueCove’s mission of bringing systematic fixed income investing to a global client base,” added Willis. “That strategy has proved highly successful, as demonstrated by the growth of the business since then, and this transaction represents the logical next step in its execution.”

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The deal is expected to close in the first quarter of 2026, subject to regulatory approvals.