Ares fund withdrawal requests decline as private credit redemptions ease

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)

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