PacWest Bancorp sold a $3.5 billion asset-backed loan portfolio to Ares Management Corp., the latest example of a bank seeking to improve liquidity by selling assets to private investment firms, Bloomberg News reported. Ares’s Alternative Credit funds bought the specialty finance portfolio backed by assets including consumer loans, mortgages and timeshare receivables, the fund manager said in a statement Monday. PacWest said in a filing that the first tranche of the deal closed last week and generated $2 billion of cash proceeds before transaction costs. Private equity and private credit shops are among the few firms with the capital and appetite needed to buy sizable amounts of consumer assets originated by bigger banks. Other lenders are dealing with their own liquidity issues, and some are also already integrating recent purchases. “This opportunity set really is only for some the largest asset managers,” Joel Holsinger, co-head of alternative credit at Ares, said in an interview. “You need to be able to speak for billions.” Even so, alternative-asset managers have been frustrated in some of their attempts to take advantage of turmoil in the industry to buy pieces of banks or pools of assets. U.S. regulators have instead selected other banks to deal with collapsed lenders. While private-investment firms’ efforts to participate in regulator-led sales of Silicon Valley Bank and Signature Bank faltered, bids for assets from lenders that are still operational have proven more successful.
