Ares Strategic Income Fund's Assets Soar 69% on Robust Investment Income

TL;DR

**Ares Strategic Income Fund is aggressively expanding its portfolio and debt, signaling a bullish bet on credit markets.**

AI Summary

ARES STRATEGIC INCOME FUND reported a significant increase in net investment income and total assets for the nine months ended September 30, 2025. Total investment income surged to $978.024 million for the nine months ended September 30, 2025, up from $342.575 million in the same period of 2024, representing a 185.5% increase. Net investment income before income taxes rose to $515.794 million, a 145.3% increase from $210.271 million in the prior year. Total assets grew to $20.550 billion as of September 30, 2025, from $12.149 billion at December 31, 2024, driven primarily by an increase in investments at fair value to $19.558 billion from $11.549 billion. Debt also increased substantially to $8.882 billion from $4.527 billion. The fund experienced net realized gains of $1.443 million and net unrealized gains of $57.251 million for the nine months ended September 30, 2025, contributing to a net increase in net assets from operations of $574.039 million. Shareholder servicing and distribution fees for Class S and Class D shares also saw notable increases, reflecting growth in these share classes.

Why It Matters

This significant growth in assets and investment income for ARES STRATEGIC INCOME FUND indicates strong performance in a competitive market, potentially attracting more investors seeking income-generating strategies. The substantial increase in debt, however, warrants close attention as it could impact future leverage and risk profiles. For employees, this growth suggests stability and potential expansion, while customers benefit from a larger, potentially more diversified fund. In the broader market, the fund's expansion highlights continued demand for strategic income products, potentially influencing other financial institutions to adjust their offerings.

Risk Assessment

Risk Level: medium — The fund's total assets increased by 69% from $12.149 billion to $20.550 billion, while debt more than doubled from $4.527 billion to $8.882 billion. This aggressive leverage, while contributing to asset growth, significantly increases the fund's exposure to interest rate fluctuations and credit risk, as evidenced by the substantial increase in interest and credit facility fees from $78.358 million to $320.406 million for the nine months ended September 30, 2025.

Analyst Insight

Investors should scrutinize the fund's debt-to-equity ratio and interest rate sensitivity given the substantial increase in debt. While income growth is strong, assess the quality of underlying investments and the fund's ability to manage its increased leverage in a rising interest rate environment.

Financial Highlights

debt To Equity

0.87

revenue

$978,024,000

operating Margin

52.7%

total Assets

$20,550,468,000

total Debt

$8,882,838,000

net Income

$515,794,000

eps

$27.58

gross Margin

N/A

cash Position

$264,215,000

revenue Growth

+185.5%

Revenue Breakdown

Key Numbers

• $20.550B — Total Assets (Increased by 69% from $12.149B at Dec 31, 2024)
• $978.024M — Total Investment Income (Increased by 185.5% for the nine months ended Sep 30, 2025)
• $515.794M — Net Investment Income Before Taxes (Increased by 145.3% for the nine months ended Sep 30, 2025)
• $8.882B — Total Debt (Increased by 96.2% from $4.527B at Dec 31, 2024)
• $574.039M — Net Increase in Net Assets from Operations (For the nine months ended Sep 30, 2025)
• $320.406M — Interest and Credit Facility Fees (Increased by 309% for the nine months ended Sep 30, 2025)
• 308,942,163 — Class I Common Shares Outstanding (As of November 12, 2025)
• 45,981,395 — Class S Common Shares Outstanding (As of November 12, 2025)
• 28,224,992 — Class D Common Shares Outstanding (As of November 12, 2025)
• $19.558B — Total Investments at Fair Value (Increased from $11.549B at Dec 31, 2024)

Key Players & Entities

• ARES STRATEGIC INCOME FUND (company) — Registrant
• $20.550 billion (dollar_amount) — Total assets as of September 30, 2025
• $12.149 billion (dollar_amount) — Total assets as of December 31, 2024
• $978.024 million (dollar_amount) — Total investment income for nine months ended September 30, 2025
• $342.575 million (dollar_amount) — Total investment income for nine months ended September 30, 2024
• $8.882 billion (dollar_amount) — Debt as of September 30, 2025
• $4.527 billion (dollar_amount) — Debt as of December 31, 2024
• $574.039 million (dollar_amount) — Net increase in net assets resulting from operations for nine months ended September 30, 2025
• Bloomberg (company) — Financial news organization
• SEC (regulator) — Securities and Exchange Commission

FAQ

Risk Factors

• Increased Leverage [high — financial]: Total debt increased by 96.2% from $4.527 billion to $8.882 billion. This substantial increase in leverage amplifies both potential returns and risks, making the fund more sensitive to interest rate fluctuations and credit market downturns.
• Interest Rate Sensitivity [high — market]: The fund's investment income is heavily reliant on interest income, which saw a 180.3% increase. This indicates a significant exposure to interest rate movements. Rising rates could increase borrowing costs, while falling rates could reduce investment income.
• Valuation of Investments [medium — market]: Investments at fair value increased by 69% to $19.558 billion. Fluctuations in market conditions can significantly impact the fair value of these investments, leading to potential unrealized gains or losses.
• Increased Fees and Expenses [medium — operational]: Shareholder servicing and distribution fees have increased, alongside a 309% surge in interest and credit facility fees to $320.406 million. Higher operating expenses can erode net investment income.
• Regulatory Compliance [low — regulatory]: As a registered investment fund, Ares Strategic Income Fund is subject to various regulations. Changes in regulatory requirements or non-compliance could lead to fines, sanctions, or reputational damage.

Industry Context

The strategic income fund sector typically focuses on generating current income for investors through a diversified portfolio of debt instruments and other income-producing assets. The current environment, characterized by potentially rising interest rates and credit market volatility, presents both opportunities for higher yields and risks related to credit quality and valuation.

Regulatory Implications

As a regulated investment company, Ares Strategic Income Fund must adhere to strict disclosure requirements and investment limitations. Any changes in tax laws or regulations impacting debt instruments or income recognition could affect the fund's performance and operational strategies.

What Investors Should Do

1. Monitor leverage levels closely.
2. Analyze the drivers of increased investment income.
3. Evaluate the impact of rising interest rates on borrowing costs and investment yields.
4. Review fee structures and operating expenses.

Key Dates

• 2025-09-30: Nine months ended September 30, 2025 — Period of significant growth in total investment income (+185.5%) and net investment income (+145.3%), alongside a substantial increase in total assets (+69%) and debt (+96.2%).
• 2024-12-31: As of December 31, 2024 — Prior period benchmark showing total assets of $12.149 billion and total debt of $4.527 billion.
• 2025-11-12: As of November 12, 2025 — Indicates share counts for Class I (308,942,163), Class S (45,981,395), and Class D (28,224,992) common shares outstanding.

Glossary

PIK interest income

Payment-in-kind interest income, where interest is paid in the form of additional debt or equity rather than cash. (A significant increase in PIK interest income suggests the fund is holding debt instruments with more complex payment structures, potentially offering higher yields but also carrying different risk profiles.)

Net asset value per share

The market value of a fund's assets minus its liabilities, divided by the number of outstanding shares. (Indicates the per-share value of the fund's holdings. For Class I, S, and D shares, it remained stable at $27.58 as of September 30, 2025, compared to $27.61 at December 31, 2024, despite significant asset and debt growth.)

Debt-to-Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. (Calculated as Total Debt / Total Net Assets. A higher ratio indicates greater financial leverage and risk. For Ares Strategic Income Fund, this ratio increased significantly due to the rise in debt.)

Year-Over-Year Comparison

For the nine months ended September 30, 2025, Ares Strategic Income Fund experienced a dramatic increase in total investment income (+185.5%) and net investment income (+145.3%) compared to the same period in 2024. This growth was accompanied by a substantial rise in total assets (+69%) and a near doubling of total debt (+96.2%). The fund's leverage has increased significantly, with a debt-to-equity ratio rising to approximately 0.87 from a lower prior-period level. New risks related to this increased leverage and interest rate sensitivity are now more prominent.

Key Financial Figures

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

Filing Documents

• asif-20250930.htm (10-Q) — 16926KB
• asifq3-25exhibit311.htm (EX-31.1) — 13KB
• asifq3-25exhibit312.htm (EX-31.2) — 13KB
• asifq3-25exhibit313.htm (EX-31.3) — 13KB
• asifq3-25exhibit321.htm (EX-32.1) — 10KB
• 0001918712-25-000092.txt ( ) — 48766KB
• asif-20250930.xsd (EX-101.SCH) — 145KB
• asif-20250930_cal.xml (EX-101.CAL) — 72KB
• asif-20250930_def.xml (EX-101.DEF) — 916KB
• asif-20250930_lab.xml (EX-101.LAB) — 1165KB
• asif-20250930_pre.xml (EX-101.PRE) — 874KB
• asif-20250930_htm.xml (XML) — 12972KB

Financial Information

Part I. Financial Information

Financial Statements

Item 1. Financial Statements Consolidated Statement of Assets and Liabilities as of September 30, 2025 (unaudited) and December 31, 2024 3 Consolidated Statement of Operations for the three and nine months ended September 30, 2025 and 2024 (unaudited) 4 Consolidated Schedule of Investments as of September 30, 2025 (unaudited) and December 31, 2024 5 Consolidated Statement of Change s in Net Assets for the three and nine months ended September 30, 2025 and 2024 (unaudited) 96 Consolidated Statement of Cash Flows for the nine months ended September 30, 2025 and 2024 (unaudited) 97

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 98

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 142

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 164

Controls and Procedures

Item 4. Controls and Procedures 166

Other Information

Part II. Other Information 167

Legal Proceedings

Item 1. Legal Proceedings 167

Risk Factors

Item 1A. Risk Factors 167

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 167

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 167

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 167

Other Information

Item 5. Other Information 167

Exhibits

Item 6. Exhibits 168

- 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 September 30, 2025 December 31, 2024 (unaudited) ASSETS Investments at fair value Non-controlled/non-affiliate company investments $ 19,458,799 $ 11,462,556 Non-controlled affiliate company investments 99,796 86,593 Total investments at fair value (amortized cost of $ 19,370,685 and $ 11,482,053 , respectively) 19,558,595 11,549,149 Cash and cash equivalents 264,215 165,777 Restricted cash 68,670 4,650 Interest receivable 128,768 110,917 Receivable for open trades 361,803 254,059 Other assets 168,417 65,362 Total assets $ 20,550,468 $ 12,149,914 LIABILITIES Debt $ 8,882,838 $ 4,527,184 Base management fee payable 10,460 6,272 Income based fee payable 27,952 15,830 Capital gains incentive fee payable 20,656 13,324 Interest and facility fees payable 63,398 58,448 Payable for open trades 910,431 1,537,150 Interest rate swap collateral payable 68,670 4,650 Accounts payable and other liabilities 52,924 40,568 Deferred tax liabilities 2,860 — Secured borrowing 269,335 — Distribution payable 77,964 45,138 Distribution and servicing fees payable 1,009 654 Total liabilities 10,388,497 6,249,218 Commitments and contingencies (Note 7) NET ASSETS Common shares, par value $ 0.01 per share, unlimited common shares authorized; 368,501 and 213,687 common shares issued and outstanding, respectively 3,685 2,137 Capital in excess of par value 10,054,026 5,797,967 Accumulated undistributed earnings 104,260 100,592 Total net assets 10,161,971 5,900,696 Total liabilities and net assets $ 20,550,468 $ 12,149,914 NET ASSET VALUE PER SHARE Class I Shares: Net assets $ 8,180,579 $ 4,761,183 Common shares outstanding ($ 0.01 par value, unlimited shares authorized) 296,655 172,421 Net asset value per share $ 27.58 $ 27.61 Class S Shares: Net assets $ 1,227,021 $ 814,414 Common shares outstandin

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