Ares Management has capped redemptions from its flagship Ares Strategic Income Fund after investors sought to withdraw more than $1.5bn during the second quarter, according to a report by the FT.
The nearly $11bn fund received redemption requests equivalent to 14.4% of net asset value, up from 11.6% in the first quarter. In line with the fund’s liquidity provisions, Ares honoured redemptions up to its 5% quarterly limit, satisfying just over a third of the requests.
The firm said the withdrawals were driven primarily by a limited number of smaller non-US institutions and family offices and that the decision was taken in the best interests of all investors. The fund has returned 8.2% over the past year.
Private credit funds have reportedly received more than $17bn of redemption requests during the second quarter, with managers fulfilling roughly one-third of those requests. The trend is testing the semi-liquid fund structure that has underpinned the industry’s expansion into the wealth channel, although industry executives maintain that redemption limits have so far prevented forced asset sales and broader market disruption.
