Ares’ non-traded BDC, Ares Strategic Income, received repurchase requests for 14.4% of shares outstanding in Q2, as redemption requests remain elevated across the sector.
The fund held its 5% quarterly repurchase limit and will fulfill about 34.7% of repurchase requests on a pro rata basis, according to a June 25 shareholder update. The vehicle has $22.6 billion in assets.
Ares said that nearly two-thirds of redemption requests were submitted by investors who had tendered in the prior quarter, when the fund received repurchase requests for 11.6% of shares outstanding and also capped redemptions at 5%.
The fund also said that repurchase requests were concentrated among a small number of non-US investors, consistent with the prior quarter. These non-US institutions and family offices represented less than 1% of the fund’s shareholders but accounted for nearly half of Q2 redemption requests, the fund said. Nearly 95% of shareholders did not seek to repurchase shares in Q2.
Repurchase requests from investors in Ares’ US private wealth channel, the largest segment of the fund’s investor base, represented only 2.4% of shares outstanding. This segment’s repurchase requests also declined by more than 35% compared to the prior quarter and accounted for nearly half of the fund’s Q2 inflows.
The decision to cap repurchases is in line with many of the fund’s peers, who have also received redemption requests over 5% in both quarters this year. Redemption requests are expected to remain elevated for the rest of the year, as investors continue to request repurchases that were unfulfilled in prior quarters.
So far in Q2 other non-traded BDCs managed by Morgan Stanley, Apollo, HPS, Cliffwater, Monroe, and Blackstone all received elevated redemption requests, and all held quarterly repurchases at a 5% limit.
krisanapong detraphiphat/Getty Images
Learn about our editorial standards.
