Ares Strategic Income Fund Fulfills 43.1% of First-Quarter Redemption Requests

Ares Strategic Income Fund, a non-listed business development company sponsored by Ares Management, fulfilled less than half of first-quarter redemption requests after hitting its structural quarterly cap, the company disclosed in a March 24, 2026, letter to shareholders. The Ares BDC joins a growing list of private credit funds facing elevated redemption requests.

Shareholders requested redemptions for approximately 11.6% of the fund’s outstanding shares as of Jan. 31, 2026. Applying its quarterly cap of 5% of aggregate net asset value, the fund fulfilled $524.5 million of the requests, representing approximately 43.1% of the capital sought.

The company noted in a March 24, 2026, letter to shareholders that the majority of these requests came from a limited number of family offices and smaller institutions in select geographies representing less than 1% of the fund’s more than 20,000 shareholders.

Despite the redemption pressure, the BDC maintained that it remained healthy and liquid. It recorded $708 million in new commitments during the same period, allowing its overall asset base to continue growing despite the heavy outflows.

As of Feb. 28, the fund’s aggregate NAV was approximately $10.7 billion. For the three months ending February 2026, the fund generated a net total return of 1%, ahead of the U.S. Leveraged Loan Index.

The fund also reported approximately $5 billion in undrawn capacity across committed debt facilities, alongside strong monthly inflows and a performing liquid credit sleeve.

The BDC paid distributions for Class I common shares at an annualized rate of 9.43% based on net asset value. The fund’s board has approved distributions consistent with prior periods through June 2026.

Ares Strategic Income Fund is not the only private credit fund to cap redemptions this quarter. Apollo Debt Solutions BDC also limited Q1 redemptions to 5% of NAV after facing comparable withdrawal volumes.

The fund reported $22.7 billion in total assets across 854 portfolio companies.

Ares Strategic Income Fund maintains its largest industry exposure in the software and services sector at 21%. The fund’s top five industry exposures also include health care equipment and services (11.2%), capital goods (8.9%), commercial and professional services (8.4%), and investment funds and vehicles (8.1%).

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