Ares Management abandoned a planned continuation fund targeting more than €1 billion in private credit assets after investors rejected the firm's valuations, according to disclosures reviewed by the Financial Times. Within the same week, Bridgepoint Group announced it would offload $1.15 billion in private credit stakes through secondary-market transactions. Two of the largest alternative asset managers in Europe just told the same story without saying a word.
Ares had structured the vehicle to allow existing limited partners to roll holdings into a new fund at current marks, a move that would lock in paper gains and extend the investment horizon. LPs refused. Bridgepoint's $1.15 billion exit follows the same logic in reverse—sell now, before the bid disappears. Both firms manage more than $100 billion in credit strategies. Neither is offloading distressed portfolios. They are navigating a market where the spread between what GPs will pay themselves and what outside capital will accept has widened past the point of deal execution.
This matters because continuation funds have become the preferred tool for private credit managers to manufacture liquidity without actually selling assets. Ares runs $232 billion in credit; continuation vehicles let it reset the clock on legacy positions while pulling forward fee income. When that mechanism fails, it signals that LPs no longer trust the marks or believe the assets will appreciate further at the stated entry price. Bridgepoint's secondary exit carries the same message with more urgency—better to take the haircut now than wait for a worse one. The private credit market has doubled since 2020, reaching $1.6 trillion in assets under management. Nearly half of that growth occurred in the past eighteen months, during which base rates sat above 5% and spreads compressed to levels last seen in 2007. Managers have been marking portfolios to models that assume borrowers can refinance at similar rates indefinitely. LPs are no longer willing to underwrite that assumption at par.
The secondary market for private credit stakes remains thin. Bridgepoint will likely sell at a discount to net asset value, possibly 8% to 12% below the GP's marks, based on recent transactions in similar strategies. That discount becomes the new reference price for every other LP sitting in a continuation fund conversation. Ares could have forced the issue by offering a wider discount to rolling LPs, but chose instead to pull the vehicle entirely. That decision preserves the fiction of stable NAVs across the rest of its credit book, at least until the next quarterly letter. It also leaves €1 billion in assets stranded in older fund structures with rapidly approaching maturity dates, meaning those positions will need to be monetized or extended through other means within the next 12 to 18 months.
Allocators should track three follow-on events. First, whether Ares attempts to resurrect the continuation fund at a lower entry price within the next six months, which would confirm the pricing gap was temporary rather than structural. Second, the actual clearing price on Bridgepoint's $1.15 billion secondary transaction, expected to close in Q3 2025—if the discount exceeds 10%, other managers will face redemption pressure as LPs reprice their own exposure. Third, how many other credit-focused GPs quietly pull or restructure continuation vehicles before year-end reporting. Ares and Bridgepoint are large enough to absorb the reputational cost. Smaller managers are not.
Bridgepoint's secondary exit will close before September. The discount to NAV will be the number every allocator uses to stress-test their private credit book, whether they own Bridgepoint or not.