Equity Firm Puts Money on Loans

Ares Management might be best known for big private equity deals, such as last year’s purchase of Dallas luxury retailer Neiman Marcus Inc. But those big transactions are only a part of the company’s business today.

“For the traditional lenders, the spigot got turned off,” said Andrew Apfelberg, a partner at Century City law firm Greenberg Glusker who specializes in corporate finance in the middle market. “Between the regulation and the tight credit, some investors saw an opportunity to get creative.” Through private equity companies such as Ares and other nonbank entities,these investors began to put their money into loans that were harder for banks to make, especially after they had their hands burned holding bad debt during the crash and were understandably cautious.