Key facts
- Ares Management's Ares Strategic Income Fund capped withdrawals after redemption requests rose to 14.4% of shares in Q2.
- Investors sought to pull $1.5 billion from the $22.6 billion fund, an increase from 11.6% in the prior quarter.
- The fund limited withdrawals to 5% of shares, its customary threshold.
- Most requests were concentrated among a small number of non-U.S. institutions and family offices.
- Withdrawal requests from U.S. private wealth investors declined 35% from the prior quarter and accounted for nearly half of Q2 inflows.
Ares Management again capped withdrawals at its flagship private credit fund, the Ares Strategic Income Fund (ASIF), after redemption requests rose to 14.4% of shares in the second quarter. Investors sought to pull $1.5 billion from the $22.6 billion fund, an increase from 11.6% in the previous quarter. The fund limited withdrawals to 5% of shares, its customary threshold.
Wealthy individuals have been pulling money from non-traded private credit funds amid concerns about lending standards and the impact of AI disruption on software companies that borrowed heavily from direct lenders. Investors pulled a combined $12.9 billion from private credit funds for wealthy individuals in the first five months of 2026, according to investment bank Robert A. Stanger.
Most requests were concentrated among a small number of non-U.S. institutions and family offices, representing less than 1% of ASIF's more than 20,000 shareholders, the fund said. They accounted for nearly half of second-quarter requests. Peer Apollo has also recently flagged that withdrawal requests at its $26 billion private credit fund moderated from U.S. and increased from offshore.
Nearly two-thirds of repurchase requests at ASIF were submitted by investors who had tendered in the prior quarter. TD Cowen analyst Bill Katz noted that the pattern of repurchase requests does not suggest widespread angst, while repeat requesters indicate redemption pressures are not building.
Withdrawal requests from U.S. private wealth investors, ASIF's largest shareholder segment, represented only 2.4% of shares and declined 35% from the prior quarter. This segment also accounted for nearly half of second-quarter inflows. CEO Michael Arougheti stated earlier this month that U.S. high-net-worth individuals were growing their alternatives exposure and not redeeming at the rate markets expected. ASIF, launched in 2022, has generated an annualized total return of 10.27% for its Class I shares since inception.