Ares Is Latest To Gate Investors In Private Credit Fund: Here's Who Will Gate Next

Just hours after we learned that Apollo was the latest Private Credit giant to gate investors in its flagship private credit fund, and warned it will also gate redemption requests in the future having been hit with over 11% of withdrawal demands while limiting quarterly redemptions to just 5%, this morning the FT reported that Ares Management has also limited withdrawals from one of its marquee private credit funds pitched to wealthy individuals, as redemptions surged to 11.6% in the first quarter amid a broad flight from the asset class.

Ares said it received $1.2bn of redemption requests at the $10.7bn Ares Strategic Income Fund in the first three months of the year. It fulfilled $524mn of those requests, or just over two-fifths of the withdrawals it faced. Previously, the fund honored all redemption requests in the final quarter of 2025, even though they had risen above the 5% threshold; back then it was still hoping the "fund run" will mitigate into 2026. It has not, and so the company decided the time has come to start gating: the $623bn investment group said it had capped redemptions from the Ares Strategic Income Fund at 5% - a threshold built into the fund that allows it to limit outflows in any one quarter.

“We have made this decision, as with all capital allocation decisions, aligned with what we believe are the best interests of the fund and all of our stakeholders, including the overwhelming majority of shareholders who remain invested,” the company said in its letter. Ares' decision follows similar moves by many of its biggest competitors, including Apollo, BlackRock, Morgan Stanley, CliffWater and many others, all of whom have seen a surge in redemption requests.

Ares described the redemptions as being driven by a “limited number” of family offices and smaller institutions, which it said represented less than 1% of the fund’s 20,000-plus investors. Yet that 1% controlled more than 11% of assets, and it wants its money back; it will get less than half of it. 

The decision to limit outflows meant the fund’s asset base still grew in the period, as it tallied $708mn of new commitments from investors, filings with the Securities and Exchange Commission showed, although one can be confident that wave of inflows has now peaked and s about to go into reverse. 

Caps on withdrawals are expected to depress the appetite that wealthy individuals have for private credit funds, and new commitments have already slowed from high-net-worth individuals. Analysts are now projecting slower fundraising across the market, which had been one of the growth drivers for investment firms including Blackstone, Ares and Blue Owl.

It may also complicate the efforts by the industry to tackle the $9tn US retirement industry, as companies await regulatory changes that will open up 401k plans to private investments.

Redemptions have been accelerating this month, with funds tracked by the FT reporting $13bn of withdrawal requests in the first quarter. 

The funds, which manage investment portfolios worth a combined $211bn, have honoured just under two-thirds of requests, leaving $4.6bn unfilled.

Ares said it believed the fund was “positioned to capitalize” on market ructions while providing investors “liquidity within its stated parameters”. 

Like its peers who have gated, Ares also scrambled to control the damage and said the fund had access to about $5bn of liquidity and that its portfolio remained healthy, telling investors it held no loans where an interest payment was more than 30 days past due. 

“Drawing on over two decades of experience investing through multiple cycles, we believe periods of market dislocation have historically created some of the most attractive opportunities,” Ares said.

Unfortunately, periods of market dislocation also prompt investors - especially retail - to ask for their money back, and here unfortunately Ares had nothing credible to say, to explain why investors in the fund are now trapped. 

Of course, it's not just Ares: with the biggest names in the industry already gating investors (boxed in red below), here is a chronological list of which funds will announce next they have suspended redemptions. 

Shares of Ares and Apollo fell by 4% Tuesday while other alternative investors wuch as TPG, Blackstone, KKR, and Blue Owl Capital also traded lower.