Ares private credit fund posts record. Monthly loss

Ares Management Corp’s Ares Strategic Income Fund suffered its largest monthly decline since inception in February, reflecting broader pressures in the $1.8tn private credit market, according to a report by Bloomberg.

The non-traded business development company, launched in December 2022 and managing close to $23bn in assets, fell 0.68% in February, with January’s small loss leaving the fund down 0.7% year-to-date.

Sources familiar with the matter said the drop primarily mirrors wider selloffs in public debt markets—used by Ares to mark its assets—rather than losses on individual investments. The fund, which became available to retail investors via Ares’ wealth management platform in April 2023, has nonetheless delivered strong long-term returns, generating annualised gains of 10.6% through January.

The February performance aligns with similar trends elsewhere in private credit. Blackstone Inc’s comparable fund recorded its worst monthly performance in over three years, driven by widening spreads and unrealised losses across public and private positions. Despite these setbacks, both Ares and Blackstone funds continue to outperform the broader leveraged loan market, where the S&P UBS Leveraged Loan Index posted -0.82% for February and -1.08% year-to-date.

Heightened redemption requests have intensified pressure on managers. Ares recently limited withdrawals from ASIF to 5% of net assets after investors sought to withdraw 11.2%. The fund confirmed it will maintain its dividend through June, underscoring resilience despite short-term market turbulence.