Ares Closes $850M Continuation Fund
Ares Management just closed an $850 million continuation vehicle for a single, eight-year-old asset. The deal is a prime example of a major PE trend: using continuation funds to extend holds on prize assets amid a slow M&A market, rather than being forced to sell.
The asset at the center of the deal is Convergint Technologies, a global systems integrator specializing in security, fire and life safety, and building automation. Ares Management originally acquired Convergint from KRG Capital in a deal that closed on February 2, 2018. Since that 2018 acquisition, Convergint has seen significant growth, approximately quadrupling its adjusted EBITDA. The company's expansion has been fueled by both organic growth and a robust M&A strategy, completing over 40 acquisitions during Ares' holding period. By 2024, Convergint's revenue reached $2.7 billion, a 10% year-over-year increase. This new continuation fund is led by Leonard Green & Partners' Sage Fund, a private equity vehicle specifically created to invest in single-asset continuation deals. The Sage Fund recently closed with over $3.6 billion in commitments, more than doubling its initial $1.5 billion target, signaling strong investor demand for this type of transaction. Goldman Sachs Alternatives also participated as an investor in the vehicle. The transaction allows Ares to provide liquidity to its initial investors while retaining a shared control position in Convergint alongside co-sponsors Leonard Green & Partners and Harvest Partners. This move allows Ares to continue capitalizing on what it considers a high-performing "trophy" asset. This deal is emblematic of a larger shift in the private equity landscape. GP-led secondary transactions, particularly single-asset continuation vehicles, have surged in popularity. In 2025, single-asset deals accounted for 53% of the total GP-led volume, which reached a record $106 billion. The rise of continuation funds provides a fourth exit route for private equity firms, adding to traditional IPOs, strategic sales, and sponsor-to-sponsor transactions. This strategy has become a core tool for PE firms, allowing them to extend ownership of their best-performing companies in a market with constrained M&A and IPO activity.
