Ares Management raised a record $36.4bn (£27.2bn) during the second quarter, as institutional investors continued to pour capital into private credit.

The alternative asset manager’s credit division accounted for $23.7bn of the total inflows, making it the leading contributor to fundraising during the three months to the end of June.

The haul included $8.5bn raised for Ares’ flagship asset-based finance strategy.

Chief executive Michael Arougheti said clients continued to allocate to the business because of its “strong and consistent fund performance across our strategies”.

Ares deployed $35.9bn during the quarter, driven by its US and European direct lending, alternative credit and real estate strategies.

Read more: Man Group net inflows top $7bn amid “clear” appetite for private credit

Deployment remained slightly constrained by subdued sponsor-backed merger and acquisition activity, amid continued geopolitical uncertainty.

However, Ares said its forward investment pipeline was now at a record level, positioning the manager to put more of its available capital to work.

Alternative credit investments delivered a gross return of 4.1 per cent during the quarter, while Ares’ US senior direct lending strategy returned 2.5 per cent.

Real assets generated a further $9.7bn of inflows during the quarter. Ares’ assets under management rose by 17 per cent year on year to $671.3bn, while fee-related earnings increased by 20 per cent to $491.1m.

Arougheti said Ares had remained active despite a slower transaction market and was now seeing a “meaningful pickup” in its firm-wide investment pipeline.

“Our diverse global origination platform enabled us to remain active investing in attractive opportunities across the platform in a slower transaction environment,” he added.

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