Ares launches $1.5bn evergreen BDC

Non-traded fund will invest in senior secured direct loans as a vehicle for HNW individuals demanding uncorrelated yield.

Ares Management Corporation has launched Ares Strategic Income Fund, a non-traded BDC which will look to invest in directly originated, senior secured, floating-rate loans to the US mid-market.

Ares has seeded the new fund with $1.5 billion in investable capital. Of this, more than $847 million consists of equity commitments from its existing institutional relationships that was raised in a private placement. An additional $625 million comes from credit facility commitments.  

ASIF will be distributed through Ares Wealth Management Solutions and will be available through registered investment advisers and financial advisers across the US. A Bloomberg story on the launch quoted Raj Dhanda, who oversees wealth management for Ares, as saying the new fund will look to high- net-worth individuals for investment. “The individual investor has been interested in uncorrelated yield for some time now,” Dhanda reportedly said, and “what makes this particularly timely was in the last year there was a sharp move in interest rates.”

ASIF will invest alongside Ares’ credit group, which had more than $214 billion in assets under management as of 31 December 2022.

Mitchell Goldstein, Ares partner and co-CEO of ASIF, said in the statement announcing the launch that ASIF provides high-net-worth investors with “a differentiated opportunity to benefit from Ares’ leading credit investment platform and cycle-tested investment approach”.

The sort of evergreen BDC represented by ASIF is part of a trend in the BDC space. As the CAIS Group has said, the evergreens offer “investor safeguards, convenient administration, immediate allocation, and enhanced liquidity”.