Ares Management Corporation has backed Australian specialist property lender Pallas Capital with a A$450m (鈧�270m) investment in its new lending vehicle.
Unnamed funds managed by the global investment firm鈥檚 alternative credit strategy have committed the capital to Pallas Funding Trust No 2 (PFT) alongside a A$50m co-investment capital from Pallas.
Sydney-based Pallas said it intended to lend this money via a range of pre-development loans, residual stock loans and investment property loans.
Dan Gallen, CIO of Pallas Capital, said the newly established lending vehicle would target medium-sized commercial real estate (CRE) loan types and borrowers and expected that most of its loans would be between A$2m and A$25m in total.
Gallen said: 鈥淭his market segment remains underserviced as it falls between the very narrow lending focus of the major banks whilst many non-bank lenders prefer to focus on either very small CRE loans or conversely much larger loan exposures of over A$50m.
鈥淲e expect to increase lending volumes substantially given the majority of commercial properties have values up to about A$35m which is precisely where PFT will focus its lending business.鈥�
He said the firm had successfully managed similar institutional facilities since 2021. With the funding from Ares, the firm could now take a wider lending mandate to market as it allowed it to target larger loan sizes and a wider range of loan solutions to better meet demand from borrowers and broker partners.
Pallas Capital has operated institutional lending facilities since 2021 and has loaned about A$850m in more than 170 loans through such facilities.
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