Ares Strategic Income Fund: Tenders Pay 38%, Leverage 1.24x

Updated November 7, 2026: the third-quarter 10-Q answers the income question, and the payout was not covered by reported income. The Form 10-Q for the quarter ended September 30, 2026 (accession 0001628280-26-071717, filed November 6) reports net investment income of $219,022 thousand for the quarter against $241,968 thousand of distributions, 90.5%, and $712,023 thousand for the nine months against $740,244 thousand, 96.2% (our arithmetic). Reported net investment income is after $38,940 thousand of expense support recoupment in the quarter; before it, income was 106.6% of distributions (our arithmetic). The 10-Q also states that loans on non-accrual were 0.4% of investments at amortized cost and 0.2% at fair value at September 30. The full read is in our review of the third-quarter 10-Q.

Updated November 4, 2026 — the third-quarter letter: three loans on non-accrual, 0.4% of the portfolio, and the distribution "never reduced". We rechecked EDGAR for Ares Strategic Income Fund (CIK 1918712) on November 4. The newest filing is the Form 8-K of November 3, 2026 (accession 0001628280-26-069528, Item 2.02), a portfolio update that reports, as of September 30, total assets of $22.6 billion across 795 portfolio companies, three companies on non-accrual representing 0.4% of the portfolio at amortized cost, a weighted average mark of 100.3%, leverage of 1.24x (1.19x net of about $463 million of cash), about $4 billion of available liquidity, a 9.64% annualized distribution rate for Class I and a 2.35% total return for the third quarter. It does not mention the Cox Capital offer or the next tender, and no Schedule TO-I for the fourth-quarter offer was on EDGAR on November 4. The Form 8-K of October 21, 2026 (repeated the same day in a prospectus supplement) remains the source for the monthly NAV: $26.69 for Class I, S and D at September 30 (from $26.74 at August 31), aggregate NAV of about $9.9 billion, about $12.3 billion of debt, and a gross monthly distribution of $0.21430 for October, November and December. Sources: Form 8-K, November 3, 2026; Form 8-K, October 21, 2026; prospectus supplement, October 21, 2026.

Cox Capital's offer: $23.15 for all of it, or NAV for 38% of it

On October 2, 2026 ASIF filed a Form 8-K saying that it "recently became aware of an unsolicited mini-tender offer by Cox Capital Partners." The terms, as the fund states them:

A mini-tender is an offer for less than 5% of a company's shares; it does not have to be filed with the SEC, so Cox's own offer document, with its expiration date and conditions, is not on EDGAR. The SEC's investor guidance warns that such offers "typically do not provide the same disclosure and procedural protections" as larger tender offers (SEC, Mini-Tender Offers: Tips for Investors). The board's 8-K says holders who already tendered "should consider withdrawing them prior to the expiration of Cox's offer."

What changed on October 21. The fund's Form 8-K of that date and the prospectus supplement that repeats it say nothing about Cox, and Cox's offer document and expiration date are still not on EDGAR. What changed is the reference price: NAV at September 30 was $26.69, so $23.15 is 13.3% below it, or about 86.7 cents per dollar of NAV (our arithmetic). The discount in dollars is $3.54 a share, about 17 months of the $0.2143 monthly distribution. The fund’s November 3 portfolio update does not mention Cox either, and as of November 4 the fund had not filed its next tender offer; its terms will decide how that comparison looks. The fund filed its last four Schedules TO-I on November 20, 2025 and on February 20, May 20 and August 20, 2026 (EDGAR filing dates), so a filing around November 20, 2026 would fit the pattern (our inference, not a filing).

What the two routes pay, for a holder of 1,000 Class I shares (our arithmetic, on filed numbers):

• Cox, if it buys all 1,000: $23,150, once. That is $3,590 less than the same shares at the August NAV ($26,740), a cost of 13.4%.
• The fund's tender, if the September proration repeats: about 382 shares bought at NAV in each quarterly offer, with the rest still invested. At 38.2% a quarter, a holder who tenders everything every quarter has sold about 62% after two offers, 76% after three and 85% after four. The shares still waiting keep receiving the $0.2143 monthly distribution, which is $2.57 a share a year, or 9.6% of NAV.
• The break-even, in plain terms: the $3.59-a-share discount equals about 17 months of distributions. Taking Cox's price only comes out ahead if NAV falls by more than that discount, net of the distributions received, before the holder can get out through the fund. Over the 21 months to September 2026, ASIF's NAV went from $27.61 to $26.69, down 3.3%.

None of this predicts the next proration, which depends on how many holders tender, and the board can resize or suspend the fund's tender. Shares held under a year also bear the fund's early repurchase deduction in the fund's tender, which Cox's price does not. The boards of other funds Cox bid for this year spell out what the ASIF 8-K leaves implicit: the bidder buys at a discount and can then tender into the fund's own program at NAV. Every Cox bid that reached SEC filings in 2026, from SREIT to Blackstone's BCRED, is in our record of Cox Capital Partners' offers.

What the fund is, in one paragraph

ASIF is Ares Management's non-traded business development company: a fund that makes senior loans to private, mostly sponsor-backed U.S. companies and sells its shares continuously at NAV to wealth-management clients. It opened in December 2022 at $25.00 a share, reached about $10.8 billion of NAV by late 2025, and at September 30, 2026 held 795 portfolio companies worth about $21.4 billion (total assets $22.6 billion, per its November 3 letter), 76.2% in first-lien loans and 92% of debt investments floating-rate, per the October 21, 2026 8-K. There is no public market for the shares. The only way out is the quarterly tender offer, which the fund sizes at up to 5% of shares outstanding.

Eight quarters of tenders

Each row is the final Schedule TO-I/A the fund filed for that offer. For March and June 2026 the fund filed a corrected final amendment weeks later, citing "a third-party administrative error"; the corrected figures are used here and both versions are in the CSV.

The break is December 2025. Requests that quarter were about seven times the September figure, and the fund met all of them only because the tender rules let an issuer buy up to an additional 2% of its shares without extending the offer — the final amendment says it accepted 100% "as permitted by Rule 13e-4(f)(1)." From March 2026 it stopped doing that and paid pro rata, with an "odd lot" priority for holders of fewer than 100 shares in June and September, and, per the September amendment, no priority for repurchase requests in the case of death or disability.

The September offer closed that way: per the final amendment filed September 25, the fund bought 19,264,139 shares and paid $515,097,753 (NAV of $26.74, less the early repurchase deduction where it applied), and 31,136,186 shares that asked to leave are still in the fund (our arithmetic).

Why the queue is not going away: money in

A fund like this can pay 5% a quarter without shrinking as long as new money comes in faster. That is what stopped. The fund publishes, in each monthly 8-K, the cumulative amount it has raised in its registered offering and private placements; the change between two consecutive 8-Ks is what came in that month (excluding reinvested distributions).

The June 30, 2026 Form 10-Q gives the same picture from the other side: proceeds from shares sold in the April-June 2026 quarter were $224.9 million across the three classes, against $1,021.1 million in the same quarter of 2025. The single strongest month in the series was the August 2025 8-K, which added $1,034.9 million; the September 2026 8-K added $44.8 million. The unregistered Class I sale reported in that 8-K was 297,543 shares for $8.0 million.

Two consequences follow, both in the filings. First, leverage rose: debt-to-equity was 0.76x at May 31, 2025 and 1.19x at June 30, 2026, eased to 1.15x at August 31, then rose to 1.24x at September 30 (1.19x net of about $463 million of cash), with $12.3 billion of debt against $9.9 billion of NAV and about $3.8 billion still available under its credit facilities, down from $4.1 billion a month earlier. The November 3 letter gives a broader figure, “approximately $4 billion in available liquidity”, and says leverage is “well below the 2.0x regulatory limit” (the 150% asset coverage test of Section 61(a)(2) of the Investment Company Act of 1940); the two measures are not the same list, and the filing does not reconcile them. Second, the fund is shrinking: aggregate NAV was about $10.8 billion at the end of May 2026, about $10.4 billion at the end of August and about $9.9 billion at the end of September. The October 21 8-K adds $34.9 million of cumulative capital raised over the September 22 filing (our arithmetic), including 543,863 Class I shares sold privately for $14.5 million.

NAV: $27.61 to $26.69

NAV per share is down 3.3% from December 2024 (our arithmetic), most of it in January and February 2026. In the first six months of 2026 the fund recorded $294.4 million of net unrealized losses on its portfolio, per the 10-Q. The fund's own performance figure is still strong — a 9.92% annualized total return for Class I since inception through September 30 (9.97% through August), with a 0.61% total return for September, per the October 21 8-K, and 2.35% for the third quarter, per the November 3 letter — because the monthly distribution more than offsets a slow NAV drift. The letter puts the premium to the Morningstar LSTA US Leveraged Loan Index at 1.68% a year since December 5, 2022; with the maximum upfront placement fee the Class I figure is 9.34%, and Class S is 8.47% without that fee (footnote 4).

The distribution has not moved

The gross monthly distribution is $0.21430 per share for every class, the same figure in the 8-Ks of June 2025, January 2026, May 2026, September 2026 and October 2026, and it is declared through December 2026. Class S and D holders receive it less their servicing fees ($0.19503 and $0.20863 net for October 2026, payable to holders of record on October 30 and paid on or about November 20). Class I's annualized distribution rate was 9.64% at September 30. In the first half of 2026, net investment income was $493.0 million and distributions were $498.3 million — 98.9% coverage (our arithmetic from the 10-Q). This is the difference from Oaktree Strategic Credit Fund, which cut twice to bring its payout down to its income: ASIF's income still roughly pays for its distribution. What it cannot pay for is everyone who wants out at once.

The November 3 letter adds three statements about the distribution, all the fund’s own. It says the board “has approved distributions consistent with prior periods through December 2026”. It says ASIF is “one of the few funds in its peer group that has never reduced its regular monthly distribution per share”, and the footnote defines the peer set as the ten largest non-traded BDCs by assets under management reported by Stanger at September 30, 2026, with “ASIF and three other funds” not having reduced theirs. And it says “100% of inception-to-date distributions were funded from cash flows from operations”. The 9.64% is the fund’s definition: the current month’s declared distribution annualized and divided by the prior month’s NAV. On our arithmetic, $0.2143 × 12 = $2.5716, which is 9.6% of $26.69. Class D’s rate is 9.39% and Class S’s 8.79%, and that is a rate on NAV, not a return on what a holder paid if they bought at a different NAV.

Credit quality, as reported, is not driving the exits, though the trend is up. Loans on non-accrual were 0.3% of investments at amortized cost (0.2% at fair value) at June 30, 2026, against none at December 31, 2025, and 0.4% at amortized cost (0.2% at fair value) at September 30, 2026 per the 10-Q filed November 6. The November 3 letter reports three companies on non-accrual, 0.4% of the portfolio at amortized cost, at September 30 (a different measure from the 10-Q’s: the letter’s footnote says loans go on non-accrual when payments are 30 days or more past due or collection in full is in doubt). It gives a weighted average mark of 100.3% (fair value over amortized cost of direct lending investments), organic year-over-year EBITDA growth of 11%, weighted average interest coverage of 2.2x, net leverage of the underlying companies of 5.2x and a weighted average loan-to-value ratio of 41%; weighted average EBITDA is $291 million and median EBITDA $94 million. The fund’s footnotes say these company statistics come from the most recent borrower financial statements, are not independently verified and may be normalized or adjusted. Those are the adviser’s numbers; the 10-Q reports the non-accrual share on its own measure, quoted above. The largest industry exposure is software and services at 21.5% of fair value at September 30, 2026.

One governance detail that fits the picture: the 2026 annual meeting was adjourned twice for lack of quorum, on June 24 and July 22, 2026, and the fund does not expect to reconvene it (8-K of July 24, 2026). Trustees serve until the 2027 meeting. Separately, an 8-K of October 27, 2026 reports that the fund’s Chief Accounting Officer stepped down effective October 31, 2026 for reasons the fund says were not a disagreement over its operations, policies or practices; the Chief Financial Officer also serves as principal accounting officer from that date.

What a holder can do with this

• If you tendered in September: 38.2% of your request was bought at the August 31 NAV of $26.74 per share, less any early repurchase deduction that applies to shares held under a year, and paid on or about September 25. The rest stays invested and keeps receiving the distribution.
• If you are deciding for the next offer: in each of the last three quarters requests were 2.3 to 2.9 times what the fund would buy (our arithmetic). Tendering more than you need, expecting proration, is common in prorated funds and makes the queue look longer than the real demand; it also means the percentage you receive depends on what everyone else does.
• What would change the math: new money recovering toward the 2025 pace, the board raising the offer above 5%, or the flow of requests easing. The September request (50.4 million shares) was smaller than June's (56.9 million) — the first quarterly decline since the queue began.
• What to read: the fourth-quarter tender offer document (not on EDGAR as of November 4), the Form 10-Q for the quarter ended September 30, filed November 6 (third-quarter income was 90.5% of distributions; see our review of it), and the monthly 8-K with the NAV and cumulative capital raised.

Other funds, same quarter: the private credit redemptions tracker lays out twelve funds' latest offers side by side, and North Haven PIF, GCRED and Carlyle's interval fund each have their own series.

FAQ

All figures are from the filings cited, read on EDGAR on September 25, 2026 (the September 30, 2026 NAV, debt, portfolio and distribution figures are from the Form 8-K of October 21, 2026 and its same-day prospectus supplement, read on October 22; the total assets, non-accrual, mark, liquidity and credit statistics are from the Form 8-K of November 3, 2026, read on November 4, and the officer change from the Form 8-K of October 27, 2026); the two Cox Capital offers are from the fund's Form 8-Ks of July 21 and October 2, 2026, read on October 3; the September 2026 tender result is from the final Schedule TO-I/A filed September 25 and read on September 26. New capital by quarter is our arithmetic from the cumulative totals in the fund's monthly 8-Ks. This is analysis of public documents, not investment, legal or tax advice.