Ares Strategic Income Fund (ASIF)

Type and structure

• Delaware statutory trust operating as a closed-end management investment company.
• Elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940.
• Externally managed by Ares Capital Management LLC (investment adviser) and administered by Ares Operations LLC (administrator), both affiliated with Ares Management Corporation.
• Perpetual-life structure; Common Shares are not listed on an exchange.

Offering and share classes

• Public, continuous offering of Common Shares with an aggregate offering cap of up to $15.0 billion (includes Class S, Class D, and Class I).
• SEC exemptive relief (granted April 17, 2023) permits multiple classes of Common Shares with different ongoing shareholder servicing and/or distribution fees.
• Share class fees (annual, as a percentage of NAV):
  • Class S: 0.85% shareholder servicing and/or distribution fee
  • Class D: 0.25% shareholder servicing and/or distribution fee
  • Class I: 0% shareholder servicing/distribution fee
• An Intermediary Manager (AMCM, after a consolidation) serves as intermediary for the Offering and coordinates relationships with selling brokers.

Investment objective and strategy

• Primary objective: generate current income; secondary objective: long-term capital appreciation.
• Focus on mid-market credit investments, including:
  • Direct-originations: first-lien senior secured loans (including unitranche), second-lien senior secured loans, subordinated secured and unsecured loans, subordinated loans with potential equity components, real estate mezzanine loans, real estate mortgages, and infrastructure debt.
  • Non-originated investments: broadly syndicated loans, high-yield corporate bonds, structured credit (including CLOs and asset-backed securities).
• Target borrowers: U.S. middle-market companies (generally EBITDA between $10 million and $250 million).
• Asset allocation requirements:
  • At least 80% of assets in debt instruments of varying maturities.
  • Up to 30% of the portfolio may be invested in non-qualifying assets under the Investment Company Act.
• Uses leverage where appropriate; may securitize loans (for example, through CLOs) to finance investments.
• Environmental, social, and governance (ESG) factors are considered in the investment process.

Portfolio composition and geography (as of December 31, 2025)

• Industry allocation (top sectors, illustrative):
  • Software and Services: 22.0%
  • Health Care Equipment and Services: 11.0%
  • Commercial and Professional Services: 8.6%
  • Investment Funds and Vehicles: 8.5%
  • Capital Goods: 7.7%
  • Financial Services: 6.7%
  • Consumer Services: 6.0%
  • Insurance: 5.1%
  • Sports, Media and Entertainment: 3.8%
  • Pharmaceuticals, Biotechnology and Life Sciences: 3.1%
  • Consumer Distribution and Retail: 3.0%
  • Independent Power and Renewable Electricity Producers: 2.4%
  • Energy: 1.9%
  • Transportation: 1.7%
  • Materials: 1.7%
  • Other: 6.8%
• Geographic region:
  • United States: 86.7%
  • Europe: 7.5%
  • Canada: 1.3%
  • Bermuda/Cayman Islands: 4.5%
• Non-accrual loans: none (as of December 31, 2025).

Co-investment and affiliated structures

• ADLP (ADLP LLC): joint venture with a large North American pension fund partner to originate first-lien senior secured loans (including unitranche).
• Ownership and commitments (as of December 31, 2025):
  • ASIF ownership: 80% of ADLP Certificates
  • ADLP partner ownership: 20% of ADLP Certificates
  • Commitments: ASIF $2.0 billion; ADLP partner $0.5 billion
• ADLP Certificates: fixed 10.0% annual coupon plus a share of excess cash flow.
• CLOs in operation:
  • ADL CLO 3: ~ $476 million principal; January 2037 notes
  • ADL CLO 5: ~ $350 million principal; April 2038 notes
  • ADL CLO 8: ~ $532 million principal; January 2039 notes
• CLO subordinated notes outstanding (examples): ADL CLO 3 ~ $218 million; ADL CLO 5 ~ $149 million; ADL CLO 8 ~ $164 million.

Debt, leverage, and coverage

• Outstanding debt (Dec 31, 2025): approximately $11.2 billion in aggregate principal amount.
• Senior unsecured notes outstanding: approximately $5.4 billion (across multiple series, maturities 2024–2032).
• CLO securitizations outstanding: ADL CLO 3 (~$476M), ADL CLO 5 (~$350M), ADL CLO 8 (~$532M).
• Weighted average interest rate on outstanding indebtedness (Dec 31, 2025): 5.5%.
• Asset coverage: 191% as of December 31, 2025 (150% requirement under the 1940 Act).
• Updated outstanding debt: approximately $10.0 billion as of March 6, 2026.

Fees and economics

• Base management fee: 1.25% per year of net assets, paid monthly in arrears.
• Incentive fees:
  • Income-based fee: computed quarterly on pre-incentive net investment income with a hurdle and catch-up structure (effective 12.5% of such income above the hurdle after the catch-up).
  • Capital gains incentive fee: 12.5% of cumulative realized capital gains since inception, net of prior paid capital gains incentive fees.
• Expense support and reimbursements:
  • Expense Support and Conditional Reimbursement Agreement with the investment adviser; adviser advanced certain operating and offering expenses.
  • Approximately $75 million of such expenses were eligible for reimbursement as of December 31, 2025.
  • Certain amounts (for example, $2.5 million of base management fee and $1.3 million of incentive fee) were agreed not to be recouped by the adviser for a period.
• Administrative expenses:
  • 2025 administrative and other fees: approximately $8 million (including reimbursable items); about $5 million of such costs were supported by the investment adviser under the Expense Support arrangement.
• Share repurchase program:
  • Fund may repurchase up to 5% of Common Shares outstanding in each quarter, at the board’s discretion.
  • Early Repurchase Deduction: 2% for shares not outstanding for at least one year (with certain exceptions).
• 12b-1 plan: Class S and Class D carry ongoing servicing/distribution fees under the Intermediary Manager; Class I has no such fees.
• Liquidity is primarily through the monthly repurchase program and potential liquidity events; Common Shares are not exchange-listed.

Management and operations

• The fund has no employees; it relies on personnel from Ares Capital Management and Ares Operations for investment, accounting, legal, compliance, operations, IT, investor relations, and other services.
• Investment decision-making and portfolio management are conducted by the ASIF investment committee, led by Mitchell Goldstein and Michael L. Smith (Co‑Heads of the Ares Credit Group), with support from Ares’ broader investment professionals.
• Staffing scale (as of December 31, 2025):
  • Ares Capital Management: ~230 U.S.-based investment professionals.
  • Ares Management (parent firm): over 1,650 investment professionals and over 2,550 operations and management professionals across its platform.

Regulatory and governance

• Governed by a board of trustees, including independent trustees.
• Subject to the Investment Company Act and related regulations applicable to BDCs and RIC tax treatment.
• Holds a Co-Investment Exemptive Order with the SEC permitting co-investments with affiliated entities managed by Ares, subject to conditions.
• Intermediary Manager arrangement (AMCM) provides distribution support and broker interactions.

Liquidity and distribution policy

• Perpetual-life fund with a monthly NAV-based distribution framework; distributions may be paid in cash or stock consistent with RIC requirements.
• Share repurchase program offers up to 5% repurchases per quarter at NAV less any applicable Early Repurchase Deduction.
• No formal obligation to liquidate or list; liquidity events may be considered but are not required.

Privacy, cybersecurity, and risk posture

• The fund relies on Ares’ cybersecurity program and governance, including risk management, incident response planning, and periodic reviews.
• Investment strategies involve leverage, direct origination, securitization, and investments in illiquid, privately negotiated assets, each of which carries material risk factors described in the fund’s filings.

Selected quantitative highlights

• Offering capacity: up to $15.0 billion of Common Shares.
• Asset coverage: 191% (as of 12/31/2025).
• Debt outstanding (12/31/2025): ~ $11.2 billion; weighted-average interest rate on debt: 5.5%.
• Senior unsecured notes outstanding: ~ $5.4 billion.
• CLO principals: ADL CLO 3 (~$476M), ADL CLO 5 (~$350M), ADL CLO 8 (~$532M).
• CLO subordinated notes: ADL CLO 3 (~$218M), ADL CLO 5 (~$149M), ADL CLO 8 (~$164M).
• ADLP joint venture: ASIF 80%, ADLP partner 20%; commitments $2.0B (ASIF) and $0.5B (partner); ADLP Certificates pay a 10.0% fixed coupon plus a share of excess cash flow.
• Outstanding debt updated: ~ $10.0 billion as of 3/6/2026.
• Administrative expenses for 2025: ~ $8.0 million (including reimbursable items); ~ $5.0 million supported by the adviser under the Expense Support arrangement.
• The fund has no employees; it relies on Ares Capital Management and Ares Operations for staffing and services.