Ares Strategic Income Fund: Securities Investigation  

Ares Strategic Income Fund: Investor Concerns

Ares Strategic Income Fund: Securities Investigation featured by top securities fraud attorneys, The White Law Group

Are you concerned about your investment in Ares Strategic Income Fund? If so, the securities attorneys at The White Law Group may be able to help you evaluate whether your brokerage firm failed to adequately disclose risks or made an unsuitable recommendation. Investors who suffered losses may have the right to pursue recovery through FINRA Dispute Resolution.

Ares Strategic Income Fund: Investigating Claims

Ares Strategic Income Fund (ASIF) is a non-listed business development company (BDC) sponsored by Ares Management. Like many non-traded BDCs, ASIF has been marketed to retail investors seeking income and perceived stability outside of publicly traded markets.

However, recent debt financing activity, rising redemption requests across the non-traded BDC space, and growing concerns about private credit quality have increased scrutiny of funds like ASIF and how they were sold to investors.

Ares Strategic Income Fund’s Recent Financial Moves

The Ares Strategic Income Fund has reportedly issued $700 million in 6.35% notes due in 2029 and entered into an interest-rate swap agreement with Wells Fargo Bank, according to industry reports. Under the swap, ASIF allegedly exchanges its fixed 6.35% rate for a floating rate tied to one-month SOFR plus 2.208%, with the agreement maturing on August 15, 2029.

The proceeds from the note issuance were reportedly used to repay existing debt, with the ability to re-borrow for general corporate purposes, including additional investments. The fund has also amended its prospectus to increase upfront fee caps, raising Class D share fees from 1.5% to 2% and setting a new 2% cap for Class I shares.

Rising Redemption Requests at Large Non-Traded BDCs

According to a January 2026 Bloomberg News report, investors have begun requesting significantly higher redemptions from large non-traded BDCs, including those sponsored by Ares.

Key findings relevant to ASIF include:

• Redemption requests at Ares’ non-traded BDCs exceeded 5% of net assets in the fourth quarter, well above historical averages of approximately 2%.

• One large withdrawal request contributed meaningfully to the surge, according to analysts cited by Goldman Sachs.

• The rise in withdrawals reflects souring sentiment toward private credit, driven by lower expected returns, credit-quality concerns, and increased regulatory scrutiny.

While Ares has reported continued net inflows and stated that its portfolios remain liquid, the increase in redemption activity highlights a critical risk for investors: liquidity in non-traded BDCs is limited and not guaranteed, especially during periods of market stress.

Why This Could Be Bad News for Investors

Liquidity Risk:
Non-traded BDCs are not required to redeem shares on demand. When redemption requests spike, funds may impose limits, delays, or suspensions, potentially trapping investor capital.

Interest-Rate Exposure:
ASIF’s use of floating-rate structures exposes investors to rising borrowing costs if rates remain elevated or increase, which may pressure income and NAV.

Higher Fees and Reduced Invested Capital:
Increased upfront fees reduce the amount of investor capital actually deployed, negatively impacting long-term returns.

Leverage and Credit Risk:
Middle-market lending involves loans to highly leveraged private-equity-backed companies. In economic downturns, defaults, restructurings, or so-called “shadow defaults” can erode portfolio value.

Mismatch Between Expectations and Reality:
Many investors were sold non-traded BDCs as lower-volatility income products, despite their dependence on leverage, illiquid loans, and private-market credit conditions.

Business Development Companies (BDCs) Are Complex Investments

BDCs invest primarily in small and mid-sized private companies, often through leveraged loans. While some BDCs generate income during favorable credit cycles, non-traded BDCs carry additional risks, including:

• Illiquidity

• High commissions and dealer incentives

• Limited transparency

• Valuation uncertainty

• Dependence on quarterly redemption programs

These characteristics make non-traded BDCs unsuitable for many retail investors, particularly retirees or those seeking capital preservation.

How to Recover Investment Losses

Broker-dealers are required to conduct reasonable due diligence and ensure that any recommended investment is suitable based on an investor’s age, risk tolerance, financial condition, and objectives.

When brokers fail to disclose liquidity risks, leverage, redemption limitations, or conflicts of interest, investors may have grounds to pursue recovery through FINRA arbitration.

If you have suffered losses in Ares Strategic Income Fund, the securities attorneys at The White Law Group may be able to help.

? Call 1-888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.

Frequently Asked Questions About Ares Strategic Income Fund

Can investors redeem shares of Ares Strategic Income Fund at any time?

No. Ares Strategic Income Fund is a non-traded business development company (BDC), meaning its shares do not trade on a public exchange. Liquidity is typically limited to periodic redemption programs, which may be capped, delayed, or suspended at the fund’s discretion. During periods of increased redemption requests or market stress, investors may be unable to access their capital when expected.

Why are redemption requests increasing for non-traded BDCs like Ares Strategic Income Fund?

Recent reports indicate that large non-traded BDCs, including those sponsored by Ares Management, have experienced a surge in investor redemption requests. Contributing factors include concerns about private credit quality, rising interest rates, increased leverage, and lower projected returns. These trends highlight the liquidity risks inherent in non-traded BDC investments.

Can investors file a lawsuit or FINRA arbitration claim related to Ares Strategic Income Fund?

Investors generally cannot sue the fund itself for market losses. However, investors may be able to file a FINRA arbitration claim against the brokerage firm or financial advisor who recommended Ares Strategic Income Fund if the investment was unsuitable or if material risks—such as illiquidity, leverage, or redemption limitations—were not properly disclosed. A securities attorney can review whether broker misconduct contributed to an investor’s losses.