Updated version 3 - As redemption pressure in private credit eases, redemption requests at Ares funds have decreased.

New chart added, details supplemented in paragraphs 9-10

Reuters, September 24 - A regulatory filing submitted on Thursday showed that redemption applications eased slightly in the third-quarter tender offer of Ares Management’s ARES.N flagship private credit fund, reflecting a general industry-wide slow-down in redemption activity.

Investors in the $22.7 billion Ares Strategic Income Fund (ASIF) applied to redeem 13.1% of their shares in the third quarter, down from 14.4% in the previous quarter. The fund caps redemptions at 5% of shares, a standard threshold for such products.

Ares stated that redemption pressure was mainly due to repeat requests from investors and added that new net redemption demand accounted for 3% of its net asset value.

This year, major private credit funds have all enforced the typical 5% redemption cap. Due to investors resubmitting unmet requests in subsequent tenders, the application volume has remained high.

“An investor who first submitted a redemption request in Q1 2026 and continued to resubmit the unmet portion in the second and third quarters is estimated to have received nearly 80% of their initial principal request back,” ASIF said.

For these investors, the fund expects to fully meet outstanding redemption requests by the end of the year, provided the application volume remains at the same level as in the third quarter.

As asset managers clear the backlog of redemption applications and investor sentiment recovers from recent turmoil, the redemption pressure on major non-listed private credit funds has started to ease.

In recent months, high-net-worth individuals have been withdrawing from non-listed private credit funds due to worries about lending standards and concerns about whether software companies that borrow heavily from direct lenders can withstand the impact of artificial intelligence.

Earlier this month, BlackRock (link) BLK.N and Apollo (link) APO.N also reported a decrease in redemption applications for their private credit funds.

Since inception, Class I shares of ASIF have delivered an annualized total return of 9.97%, outperforming broadly syndicated loans by 161 basis points.

Related data for the Blue Owl OWL.N fund is expected to be released in the coming weeks.

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