Ares fund withdrawal requests decline as private credit redemptions ease

In a notable decline, withdrawal requests at Ares Management's flagship private credit fund, the Ares Strategic Income Fund (ASIF), eased slightly in its third-quarter tender offer, according to a regulatory filing released on Thursday. This decrease in redemption requests indicates a broader cooling trend across the sector, with investors in the $22.7 billion ASIF seeking to redeem only 13.1% of shares, down from 14.4% in the prior quarter.

The fund had set a limit of 5% for such withdrawals, a standard practice for private credit vehicles.

Wealthy individuals have been withdrawing funds from non-traded private credit funds in recent months, driven by concerns over lending standards and the potential impact of AI disruption on software companies that have borrowed heavily from direct lenders. However, redemption pressures at major non-traded private credit funds appear to be easing as asset managers clear backlogs of withdrawal requests and investor sentiment improves after recent turbulence.

BlackRock and Apollo recently reported a decline in redemption requests at their private credit funds, signaling a similar downward trend. While redemption demand is easing across most reporting funds, some of the largest funds still have backlogged requests. Kevin Gannon, chairman and CEO of Stanger, which tracks alternative assets, noted that the direction of redemption demand is encouraging, though it is too early to conclude that the broader market has turned a corner.

Much of the redemption pressure at ASIF came from investors submitting repeat requests, with net new withdrawal demands amounting to 3% of net asset value. The fund reported that investors who had submitted repurchase requests in Q1 2026 and resubmitted any unfulfilled portions in Q2 and Q3 had received nearly 80% of their originally requested capital. ASIF expects to satisfy most unfulfilled requests by year-end, provided redemption requests remain consistent with the third quarter.

ASIF Class I shares have delivered a 9.97% annualized total return since inception, outperforming broadly syndicated bank loans by a 161-basis-point margin. Additional data from Blue Owl funds is expected in the coming weeks.