Ares Management stock falls after limiting fund withdrawals

Investing.com -- Ares Management (NYSE: ARES) shares fell 4% Tuesday after the Financial Times reported the company limited withdrawals from its $10.7 billion Ares Strategic Income Fund.

The $623 billion investment group capped redemptions from the private credit fund at 5%, a threshold built into the fund structure that allows it to limit outflows in any one quarter. The decision came after redemption requests surged to 11.6% in the first quarter amid broader outflows from the private credit asset class.

Ares received $1.2 billion in redemption requests at the fund during the first three months of the year. The company fulfilled $524 million of those requests, representing just over two-fifths of the total withdrawal requests. The fund had honored all redemption requests in the fourth quarter of 2024, even though they had risen above the 5% threshold.

"We have made this decision, as with all capital allocation decisions, aligned with what we believe are the best interests of the fund and all of our stakeholders, including the overwhelming majority of shareholders who remain invested," the company said in its letter.

The Ares Strategic Income Fund is marketed to wealthy individuals and represents one of the firm’s marquee private credit offerings. The move follows similar actions by competitors including Apollo Global Management and BlackRock’s HPS Investment Partners unit, which have also implemented withdrawal restrictions on their private credit funds amid increased redemption pressures.

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