Sept 24 (Reuters) – Withdrawal requests at Ares Management’s flagship private credit fund eased slightly in its third-quarter tender offer, a regulatory filing showed on Thursday, reflecting a broader cooldown in redemptions across the sector.
Investors in the $22.7 billion Ares Strategic Income Fund (ASIF) sought to redeem 13.1% of shares in the third quarter, down from 14.4% in the previous quarter. The fund limited withdrawals to 5% of shares, the customary threshold for such vehicles.
Wealthy individuals have pulled money from non-traded private credit funds in recent months amid concerns about lending standards and whether software companies that have borrowed heavily from direct lenders will weather AI disruption.
But redemption pressures at major non-traded private credit funds are showing signs of easing as asset managers clear backlogs of withdrawal requests and investor sentiment rebounds from recent turbulence.
Earlier this month, BlackRock and Apollo also reported a decline in redemption requests at their private credit funds.
“Redemption demand is easing across most reporting funds, but at several of the largest, requests remain backlogged and persisting. It is too soon to conclude that the broader market has turned a corner, but the direction is encouraging,” said Kevin Gannon, chairman and CEO of Stanger, which tracks so-called alternative assets.
The Ares fund said much of the redemption pressure came from investors submitting repeat requests, adding that net new withdrawal demands amounted to 3% of net asset value.
Major private credit funds have enforced the customary 5% limit on redemptions this year, keeping withdrawal requests elevated as investors resubmit unfulfilled requests in subsequent tender offers.
“An investor who first submitted a repurchase request in Q1 2026 and has continued to resubmit any unfulfilled portion of that request in Q2 and Q3 is expected to have received nearly 80% of its originally requested capital,” ASIF said.
For these investors, the fund expects to mostly satisfy unfulfilled requests by year-end, assuming withdrawal requests remain in line with the third quarter.
ASIF Class I shares have generated a 9.97% annualized total return since inception, representing a 161-basis-point premium to broadly syndicated bank loans.
Data from Blue Owl funds is expected in the coming weeks.
(Reporting by Pritam Biswas and Arasu Kannagi Basil in Bengaluru; Editing by Tasim Zahid and Jonathan Ananda)
