Ares Management has become the latest alternative asset manager to limit investor withdrawals from a private credit fund capping redemptions from its $10.7bn Ares Strategic Income Fund after requests exceeded the vehicle’s quarterly threshold, according to a report by the Financial Times.
The firm said it received approximately $1.2bn in redemption requests during the first quarter, equivalent to 11.6% of the fund. In line with its structure, Ares capped redemptions at 5%, fulfilling around $524m of withdrawal requests.
The move mirrors similar steps taken by peers including Apollo Global Management and BlackRock’s HPS Investment Partners, as liquidity constraints emerge across the asset class.
Private credit has faced increased scrutiny in recent months, with investors reassessing exposure to loans backing private equity transactions, particularly as exit activity slows and older deals remain unrealised.
Despite the outflows, the fund continued to attract new capital, recording approximately $708m in inflows over the same period, resulting in overall asset growth. The strategy, which uses leverage and holds a diversified portfolio of loans and credit instruments, reported a modest decline in February.
Ares attributed the redemption activity to a relatively small group of investors, including family offices and smaller institutions, and said the decision to limit withdrawals was aimed at protecting the interests of remaining investors. The firm added that the fund maintains significant liquidity and a broadly stable portfolio.
