Key Takeaways
- • The Ares Strategic Income Fund posted a record monthly loss of 0.68% in February 2026, marking its worst performance since inception in December 2022, according to Bloomberg calculations based on regulatory filings.
- • The fund manages approximately $23 billion in assets and declined 0.7% year-to-date through February, including a small loss in January, signaling sustained underperformance.
- • February 2026 represented the worst month for the broader leveraged loan market since September 2022, indicating systemic deterioration across the $1.8 trillion private credit market.
- • The decline reflects mounting pressure on non-traded business development companies and signals broader challenges in private credit performance that extend beyond a single fund or manager.
Summary
The Ares Strategic Income Fund, a non-traded business development company established in December 2022 and managed by Ares Management Corp., experienced its steepest monthly loss on record in February 2026. The fund declined 0.68% during the month, according to Bloomberg calculations derived from the fund's regulatory filings. This marks a significant deterioration in performance for what has been one of the larger players in the private credit landscape.
The underperformance extended into the new year, with the fund posting a modest loss in January as well. Through the first two months of 2026, the fund—which manages nearly $23 billion in assets—had declined 0.7% year-to-date. This sustained weakness suggests ongoing headwinds rather than a single month of volatility.
The February decline coincided with broader weakness in credit markets. The leveraged loan market posted its worst monthly performance in February 2026 since September 2022, indicating that Ares' losses reflect systemic pressures across the $1.8 trillion private credit market rather than fund-specific issues. This broader market deterioration underscores growing concerns about valuation sustainability and credit quality across the private credit space. The convergence of declining performance at a major manager with sector-wide weakness signals that challenges in private credit have become increasingly difficult to ignore for institutional investors and allocators.
The underperformance extended into the new year, with the fund posting a modest loss in January as well. Through the first two months of 2026, the fund—which manages nearly $23 billion in assets—had declined 0.7% year-to-date. This sustained weakness suggests ongoing headwinds rather than a single month of volatility.
The February decline coincided with broader weakness in credit markets. The leveraged loan market posted its worst monthly performance in February 2026 since September 2022, indicating that Ares' losses reflect systemic pressures across the $1.8 trillion private credit market rather than fund-specific issues. This broader market deterioration underscores growing concerns about valuation sustainability and credit quality across the private credit space. The convergence of declining performance at a major manager with sector-wide weakness signals that challenges in private credit have become increasingly difficult to ignore for institutional investors and allocators.
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