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Ares Fund Sees Easing Redemptions
25 Sep
Summary
- Withdrawal requests at Ares' flagship fund eased slightly in Q3.
- The fund limited withdrawals to the customary 5% of shares.
- Investor sentiment rebounds as redemption pressures ease.
Withdrawal requests at Ares Management's flagship private credit fund saw a slight decrease in the third quarter, according to a regulatory filing. The $22.7 billion Ares Strategic Income Fund (ASIF) experienced investors seeking to redeem 13.1% of shares, a reduction from the 14.4% in the prior quarter. Despite this easing, the fund maintained its customary limit of 5% on share redemptions.
This trend indicates a broader cooling of redemption pressures across the private credit sector. Recent months saw wealthy individuals withdrawing funds due to concerns over lending standards and potential impacts of AI disruption on software companies. However, major asset managers are clearing backlogs, and investor sentiment is improving, contributing to the decline in redemption requests, as also observed at BlackRock and Apollo funds.
The Ares fund noted that a significant portion of redemption pressure stemmed from investors submitting repeat requests, with net new withdrawal demands amounting to 3% of net asset value. For investors who first submitted requests in Q1 2026 and have continued resubmitting, the fund anticipates satisfying nearly 80% of their originally requested capital by year-end, assuming current withdrawal request levels persist.
ASIF Class I shares have achieved a 9.97% annualized total return since inception, outperforming broadly syndicated bank loans by 161 basis points. Data from Blue Owl funds is anticipated in the coming weeks.
