Ares BDC Board Urges Shareholders to Reject Below-NAV Mini-Tender

The board of trustees of Ares Strategic Income Fund, or ASIF, has rejected an unsolicited mini-tender offer from Cox Capital Partners and its affiliates, recommending shareholders not tender their shares.

Cox is offering to purchase up to 450,000 Class I shares of the nontraded business development company at $22.95 per share – a price the fund said represented a 15% discount to the net asset value per Class I share as of May 31, 2026, and approximately 14% below the fund’s June 30 NAV of $26.71 per Class I share. The shares subject to Cox’s offer represent less than 0.15% of the fund’s outstanding Class I shares as of May 31, according to the Ares fund.

ASIF said it and its investment adviser, Ares Capital Management LLC, are not associated with Cox, its offer, or any related materials Cox may distribute. The board determined the offer is not advisable and is not in shareholders’ best interests given the discount to NAV, and recommended investors reject it. Shareholders who don’t wish to tender don’t need to take any action, the fund said. Shareholders who have already tendered shares to Cox were advised to consider withdrawing them before Cox’s offer expires.

The activity coincided with the BDC’s routine monthly disclosures, including NAV figures, distribution declarations for July, August, and September, and portfolio composition data as of June 30. The fund’s aggregate NAV stood at approximately $10.2 billion as of that date, with a debt-to-equity ratio of 1.19x.

The company said it continues to deliver durable current income and sustained long-term outperformance relative to the Morningstar LSTA US Leveraged Loan Index, which is designed to reflect the U.S. loan market’s weighted performance of institutional leveraged loans. Since inception through June 30, the BDC has generated a 9.94% annualized total return for Class I shares, “outperforming leveraged loans shown on such index over the same period by 170 bps,” ASIF reported. As of the end of the second quarter, the company’s annualized distribution rate for Class I shares was 9.63%.

Last month, ASIF said it would repurchase shares equal to 5% of its outstanding common shares in its second-quarter tender offer after investors submitted redemption requests covering 14.4% of shares outstanding – nearly three times the fund’s quarterly cap. The fund received tenders for approximately 56.9 million shares, or roughly $1.54 billion at the May 31 net asset value of $27.00 per share across all share classes. It accepted 34.7% of requested amounts on a pro rata basis, with priority given to holders of fewer than 100 shares.

As of June 30, 77.8% of the fund’s portfolio was in first lien senior secured loans, 92% of debt investments were floating rate, and the fund had investments in 828 portfolio companies with an average position size of approximately 0.1% of fair value. Top industries by investment included software and services at 21.3%, commercial and professional services at 9.8%, and health care equipment and services at 9.7%.

ASIF is a publicly registered nontraded business development company advised by Ares Capital Management LLC, a subsidiary of Ares Management.

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