The Ares-managed BDC reported over $21.5 billion in portfolio investments and raised billions in new equity as it expanded lending operations across middle-market companies.

March 10, 2026

Ares Strategic Income Fund, a non-traded business development company managed by a subsidiary of Ares Management Corporation, reported dramatic growth during fiscal year 2025, nearly doubling its investment portfolio and significantly expanding its capital base through continuous share offerings and new debt issuances.

The fund, formed as a Delaware statutory trust in March 2022 and focused on generating current income through lending to U.S. middle-market companies, ended the year with total investments at fair value of approximately $21.5 billion, up from roughly $11.5 billion at the end of 2024. Total net assets grew to $10.5 billion from $5.9 billion over the same period.

Robust Investment Activity

The fund committed approximately $19.8 billion to new investments during 2025, compared with roughly $13 billion in the prior year. After accounting for exits totaling about $7.4 billion, net new investment commitments reached approximately $12.3 billion. First lien senior secured loans represented the vast majority of capital deployed, with approximately $14.2 billion funded during the year.

The weighted average yield on the total portfolio stood at 8.7 percent at both amortized cost and fair value as of year-end, down modestly from 8.9 percent a year earlier, reflecting the impact of declining base interest rates. Approximately 90 percent of new investment commitments carried floating interest rates.

Software and services remained the largest industry concentration at 22 percent of portfolio fair value, followed by health care equipment and services at 11 percent and commercial and professional services at roughly 9 percent. U.S. borrowers represented nearly 87 percent of investments by geography.

Strong Earnings Growth

Total investment income surged to approximately $1.45 billion for the year, up from $554 million in 2024, driven primarily by the substantially larger average portfolio size. Interest income alone reached $1.37 billion. Net investment income after expenses totaled approximately $735 million, more than double the prior year figure of $324 million.

The fund recorded net realized gains of roughly $46 million, partly from the sale of investment commitments to its newly established joint venture. Net unrealized gains and losses were essentially flat, resulting in a total net increase in net assets from operations of approximately $782 million.

Net asset value per share for all three share classes ended the year at $27.48, compared with $27.61 at the close of 2024, remaining relatively stable throughout the year in a range of $27.27 to $27.60.

Capital Raising and Debt Expansion

The fund continued aggressive capital raising through continuous share offerings, issuing approximately 191 million new shares across its three classes during 2025 for total proceeds of roughly $5.3 billion. Share repurchases totaled about $850 million, including a notably large fourth-quarter tender offer of approximately 21.7 million shares.

Outstanding debt grew substantially to approximately $11.2 billion from $4.6 billion at year-end 2024. Key debt activities during the year included:

• Five new unsecured note issuances totaling $2.95 billion in aggregate principal, with maturities ranging from 2028 to 2032
• Two new CLO securitizations — a $499 million transaction in April and a $696 million transaction in December — supplementing the $694 million CLO completed in late 2024
• Expanded credit facilities, including a larger revolving credit facility commitment of $3.25 billion

The weighted average stated interest rate on all outstanding debt decreased to 5.5 percent from 6.3 percent, reflecting both lower benchmark rates and improved borrowing spreads. Asset coverage stood at 191 percent, well above the 150 percent minimum required under the Investment Company Act.

Joint Venture Launch

A significant development was the establishment of the ADLP, a joint venture with a large North American pension fund to make first lien senior secured loans to middle-market companies. The fund holds an 80 percent stake and committed $2 billion in subordinated certificates, of which $391 million was funded by year-end. The certificates carry a 10 percent fixed interest rate plus participation in excess cash flows, yielding approximately 13 percent. By December 31, the ADLP portfolio had grown to roughly $1.7 billion across 313 borrowers.

Distributions and Expenses

The fund maintained steady monthly distributions at a gross rate of roughly $0.2143 per share, with net distributions to Class S and Class D shareholders reduced by servicing fees of 0.85 percent and 0.25 percent annually, respectively. Total distributions declared during the year amounted to approximately $816 million.

Total operating expenses rose to $735 million from $266 million, with interest and credit facility fees comprising the largest component at $478 million. The base management fee reached $111 million and the income-based incentive fee totaled $104 million. The investment adviser continued providing approximately $46 million in expense support while recouping roughly $23 million of previously advanced expenses.

Credit Quality and Forward Outlook

Portfolio credit quality remained strong, with a weighted average investment grade of 3.0 on the adviser’s four-point scale, where 3 indicates risk levels consistent with origination. No loans were on non-accrual status at year-end, an improvement from the prior year. Approximately 97 percent of portfolio companies by fair value were rated at grade 3 or above.

Following year-end, the fund issued an additional $700 million of unsecured notes maturing in 2031, expanded the SB Funding Facility to $1.5 billion, and increased the SG Funding Facility by $500 million to $2.325 billion — signaling continued growth ambitions heading into 2026.