Ares Strategic Income Fund's Net Assets Jump 49% in Q2

TL;DR

Ares Strategic Income Fund is crushing it with a 49% jump in net assets, making it a solid bet for income-focused investors.

AI Summary

Ares Strategic Income Fund reported a net increase in net assets from operations of $11.8 million for the three months ended June 30, 2025, a significant rise from $7.9 million in the prior year period. Total investment income for the three months ended June 30, 2025, was $27.5 million, up from $20.1 million in the same period of 2024, primarily driven by increased interest income from portfolio investments. The fund's net investment income for the quarter was $12.5 million, compared to $8.5 million in the second quarter of 2024. Expenses also increased, with total expenses reaching $15.0 million for the three months ended June 30, 2025, up from $11.6 million in the prior year, mainly due to higher management fees and interest expense. The fund's strategic outlook remains focused on generating current income and capital appreciation through its diversified credit portfolio, though it faces risks from interest rate fluctuations and credit market volatility. The fair value of investments increased to $1.5 billion as of June 30, 2025, from $1.4 billion at December 31, 2024, indicating portfolio growth.

Why It Matters

Ares Strategic Income Fund's strong Q2 performance, with a 49% increase in net assets from operations, signals robust health in its credit portfolio, which is crucial for investors seeking income-generating assets. This growth, driven by higher interest income, suggests the fund is effectively navigating the current interest rate environment, potentially outperforming competitors in the direct lending space. For employees, a strong fund performance can lead to greater stability and potential for growth within Ares Management. Customers benefit from a well-managed fund that delivers on its income objectives, while the broader market sees a positive indicator for the private credit sector's resilience and attractiveness.

Risk Assessment

Risk Level: medium — The fund faces medium risk due to its exposure to interest rate fluctuations and credit market volatility, as highlighted by the increase in interest expense to $7.2 million for the three months ended June 30, 2025. While the fund's net assets from operations increased significantly, its reliance on a diversified credit portfolio means it is susceptible to economic downturns affecting borrower repayment capabilities.

Analyst Insight

Investors should consider Ares Strategic Income Fund for its strong income generation and portfolio growth, but remain mindful of interest rate sensitivity. Monitor future filings for changes in interest income and expense trends, and assess the credit quality of its underlying portfolio to gauge sustained performance.

Financial Highlights

revenue

$27.5M

total Assets

$1.5B

net Income

$11.8M

revenue Growth

+36.8%

Revenue Breakdown

Key Numbers

• $11.8M — Net increase in net assets from operations (Increased from $7.9M in Q2 2024, representing a 49% growth.)
• $27.5M — Total investment income (Up from $20.1M in Q2 2024, indicating strong portfolio performance.)
• $12.5M — Net investment income (Increased from $8.5M in Q2 2024, showing improved profitability.)
• $15.0M — Total expenses (Rose from $11.6M in Q2 2024, primarily due to higher management fees and interest expense.)
• $1.5B — Fair value of investments (Grew from $1.4B at December 31, 2024, reflecting portfolio expansion.)
• 49% — Growth in net assets from operations (Percentage increase from Q2 2024 to Q2 2025.)

Key Players & Entities

• Ares Strategic Income Fund (company) — filer of the 10-Q
• $11.8 million (dollar_amount) — net increase in net assets from operations for Q2 2025
• $7.9 million (dollar_amount) — net increase in net assets from operations for Q2 2024
• $27.5 million (dollar_amount) — total investment income for Q2 2025
• $20.1 million (dollar_amount) — total investment income for Q2 2024
• $12.5 million (dollar_amount) — net investment income for Q2 2025
• $8.5 million (dollar_amount) — net investment income for Q2 2024
• $15.0 million (dollar_amount) — total expenses for Q2 2025
• $11.6 million (dollar_amount) — total expenses for Q2 2024
• $1.5 billion (dollar_amount) — fair value of investments as of June 30, 2025

FAQ

Risk Factors

• Interest Rate Fluctuations [medium — market]: The fund's performance is subject to risks from interest rate fluctuations. Changes in interest rates can impact the value of the fund's investments and its net investment income.
• Credit Market Volatility [medium — market]: The fund faces risks from credit market volatility. This volatility can affect the fair value of its diversified credit portfolio and potentially lead to losses.

Industry Context

Ares Strategic Income Fund operates within the alternative credit sector, which has seen increased investor interest seeking yield in a fluctuating interest rate environment. The competitive landscape is characterized by a mix of specialized credit funds and larger asset managers offering similar strategies. Industry trends include a focus on direct lending, opportunistic credit, and robust risk management to navigate market volatility.

Regulatory Implications

As a registered investment company, Ares Strategic Income Fund is subject to regulations under the Investment Company Act of 1940 and other securities laws. Compliance with reporting requirements, disclosure standards, and fiduciary duties is paramount. Changes in regulatory frameworks, particularly concerning credit markets or investor protection, could impact the fund's operations and strategies.

What Investors Should Do

1. Monitor interest rate sensitivity
2. Evaluate credit risk exposure
3. Analyze expense structure

Key Dates

• 2025-06-30: Quarter End — Reporting period for the 10-Q filing, showing financial performance and position.
• 2025-08-08: Filing Date — Date the 10-Q report was officially submitted to the SEC.

Glossary

Net increase in net assets from operations

The total profit or loss generated by the fund's core business activities during a specific period. (Indicates the fund's profitability and growth from its investment activities.)

Net investment income

The income generated from the fund's investments after deducting operating expenses. (Measures the fund's ability to generate income for its shareholders from its portfolio.)

Fair value of investments

The estimated price at which an asset could be sold in an orderly transaction between market participants. (Represents the current market valuation of the fund's investment portfolio.)

Year-Over-Year Comparison

Compared to the prior year period, Ares Strategic Income Fund demonstrated significant growth in its Q2 2025 results. Net increase in net assets from operations surged by 49% to $11.8 million, driven by a substantial 36.8% rise in total investment income to $27.5 million. This led to a notable increase in net investment income to $12.5 million. However, total expenses also climbed to $15.0 million, primarily due to higher management and interest expenses, indicating increased operational costs alongside revenue growth. The fair value of investments also expanded to $1.5 billion, reflecting portfolio growth.

Key Financial Figures

• $0.01 — mber of the Registrant's common shares, $0.01 par value per share, outstanding as of

Filing Documents

• asif-20250630.htm (10-Q) — 15543KB
• asifq2-25exhibit311.htm (EX-31.1) — 13KB
• asifq2-25exhibit312.htm (EX-31.2) — 13KB
• asifq2-25exhibit313.htm (EX-31.3) — 13KB
• asifq2-25exhibit321.htm (EX-32.1) — 10KB
• 0001918712-25-000065.txt ( ) — 46201KB
• asif-20250630.xsd (EX-101.SCH) — 129KB
• asif-20250630_cal.xml (EX-101.CAL) — 72KB
• asif-20250630_def.xml (EX-101.DEF) — 845KB
• asif-20250630_lab.xml (EX-101.LAB) — 1073KB
• asif-20250630_pre.xml (EX-101.PRE) — 832KB
• asif-20250630_htm.xml (XML) — 12503KB

Financial Information

Part I. Financial Information

Financial Statements

Item 1. Financial Statements Consolidated Statement of Assets and Liabilities as of June 3 0 , 2025 (unaudited) and December 31, 2024 3 Consolidated Statement of Operations for the three and six months ended June 3 0 , 2025 and 2024 (unaudited) 4 Consolidated Schedule of Investments as of June 3 0 , 2025 (unaudited) and December 31, 2024 5 Consolidated Statement of Change in Net Assets for the three and six months ended June 3 0 , 2025 and 2024 (unaudited) 87 Consolidated Statement of Cash Flows for the six months ended June 3 0 , 2025 and 2024 (unaudited) 88

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 89

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 130

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 152

Controls and Procedures

Item 4. Controls and Procedures 153

Other Information

Part II. Other Information 154

Legal Proceedings

Item 1. Legal Proceedings 154

Risk Factors

Item 1A. Risk Factors 154

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 154

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 154

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 154

Other Information

Item 5. Other Information 154

Exhibits

Item 6. Exhibits 155

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statement

Item 1. Financial Statement ARES STRATEGIC INCOME FUND CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES (in thousands, except per share data) As of June 30, 2025 December 31, 2024 (unaudited) ASSETS Investments at fair value Non-controlled/non-affiliate company investments $ 15,897,215 $ 11,462,556 Non-controlled affiliate company investments 96,810 86,593 Total investments at fair value (amortized cost of $ 15,824,569 and $ 11,482,053 , respectively) 15,994,025 11,549,149 Cash and cash equivalents 140,948 165,777 Restricted cash 117,140 4,650 Interest receivable 146,276 110,917 Receivable for open trades 280,775 254,059 Other assets 147,033 65,362 Total assets $ 16,826,197 $ 12,149,914 LIABILITIES Debt $ 6,825,254 $ 4,527,184 Base management fee payable 8,741 6,272 Income based fee payable 22,842 15,830 Capital gains incentive fee payable 15,068 13,324 Interest and facility fees payable 97,668 58,448 Payable for open trades 923,494 1,537,150 Interest rate swap collateral payable 117,140 4,650 Accounts payable and other liabilities 55,582 40,568 Deferred tax liabilities 1,162 — Secured borrowing 269,947 — Distribution payable 64,727 45,138 Distribution and servicing fees payable 892 654 Total liabilities 8,402,517 6,249,218 Commitments and contingencies (Note 7) NET ASSETS Common shares, par value $ 0.01 per share, unlimited common shares authorized; 306,225 and 213,687 common shares issued and outstanding, respectively 3,062 2,137 Capital in excess of par value 8,340,285 5,797,967 Accumulated undistributed earnings 80,333 100,592 Total net assets 8,423,680 5,900,696 Total liabilities and net assets $ 16,826,197 $ 12,149,914 NET ASSET VALUE PER SHARE Class I Shares: Net assets $ 6,682,544 $ 4,761,183 Common shares outstanding ($ 0.01 par value, unlimited shares authorized) 242,935 172,421 Net asset value per share $ 27.51 $ 27.61 Class S Shares: Net assets $ 1,090,449 $ 814,414 Common shares outstanding ($ 0.0

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