Ares Management (NYSE:ARES) announced it would limit withdrawals from its Ares Strategic Income Fund after facing a significant increase in redemption requests. The decision comes as the fund, which targets affluent investors, saw redemptions rise to 11.6% in the first quarter, prompting the firm to cap outflows at 5%.
The Financial Times reported that the $10.7 billion fund received $1.2 billion in redemption requests during this period, fulfilling $524 million, which is slightly over 40% of the total requests.
Ares explained that the redemptions were primarily initiated by a small group of family offices and smaller investors, collectively representing less than 1% of the fund’s more than 20,000 investors. The fund’s assets, bolstered by leverage, comprise loans and securities valued at $20.8 billion, FT stated.
Despite these constraints, the fund managed to grow …
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