Ares adds an arranger to Asia direct lending

Ares Management has brought in James Garforth as a principal in its Asia direct lending business, a hire the firm's spokesperson confirmed to Reuters after the newswire reported it. Garforth will be based in Hong Kong and report to Peter Graf, the partner who heads Asia direct lending for Ares, according to an internal memo the newswire saw.

Garforth joins from BGH Capital in Melbourne, where his LinkedIn profile shows he has led the firm's capital markets business since July 2023. Before that he worked in KKR's capital markets division in Sydney, and the first decade of his career went to Credit Suisse's leveraged finance group, split between Sydney and New York; he holds a bachelor's of commerce and economics from the University of Queensland.

Three seats, and none of them is a credit seat. Every job on that résumé sits on the arranging side of a debt trade—a sponsor's capital markets desk, a rival sponsor's capital markets desk, a bank's leveraged finance division—so the Hong Kong buildout is an origination bet, whatever the mandate eventually becomes.

The hire implies a view about where Asian volume comes from next. A capital-markets principal earns his keep on sponsor M&A and the financing packages stapled to it, the same dynamic visible in the EUR60bn European pipeline that is two-thirds M&A, where the effect on spreads is the part that sticks; staffing for origination is a wager that deal supply arrives faster than compression does.

Ares has been working both sides of the reset, and PCD's records show the firm was among four managers that priced nearly $2bn of US CLO resets in August, repricing seasoned vehicles while fresh-issue demand held at the tight end. It has also been a seller: Silver Point bought a Learning Care 2028 term loan that Ares and Carlyle were trimming. Repricing your funding and trimming your book in the same quarter is what a manager does when it means to keep writing new paper, and someone has to find that paper.

The next hire will be the tell, and related coverage of the appointment notes Ares already brought in a former Goldman Sachs banker, Morse, to head Asia credit, so the senior bench in the region is not new and Garforth's seat likely sits below Graf rather than beside him. If a credit underwriter follows, Ares expects to hold Asian loans at today's spreads; if another markets seat follows, it expects to move the risk to someone else. The direct-lending reset has moved from asset sales toward secondaries-led fundraising, and the test now is whether a EUR60bn deal pipeline compresses spreads before volume recovers. Hong Kong is staffed for the first half of that trade.