Ares Strategic Income Caps Redemptions Again
Ares Management’s $22.6 billion Ares Strategic Income Fund capped investor repurchases for a second consecutive quarter after receiving redemption requests well above its quarterly limit, underscoring continued liquidity pressures across the non-traded business development company market.
The non-traded BDC received repurchase requests representing 14.4% of outstanding shares during the second quarter, according to a June 25 shareholder update. Consistent with its quarterly repurchase policy, the fund honored its 5% repurchase limit, fulfilling approximately 34.7% of investor requests on a pro rata basis.
Redemption demand increased from the first quarter, when investors sought to redeem 11.6% of outstanding shares, and the fund similarly imposed its 5% cap.
Ares said nearly two-thirds of second-quarter redemption requests came from investors whose requests had already been partially fulfilled during the prior quarter, suggesting a backlog of uncompleted withdrawals. The firm also noted that redemption activity remained concentrated among a small group of non-U.S. institutional investors and family offices. Although those investors represent less than 1% of the fund’s shareholder base, they accounted for nearly half of all repurchase requests during the quarter.
At the same time, the firm emphasized the stability of its broader investor base, noting that approximately 95% of shareholders did not submit redemption requests during the period.
