Ares Core Infrastructure Fund

08/07/2026 | Press release | Distributed by Public on 08/07/2026 14:28

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The information contained in this section should be read in conjunction with our unaudited consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report. In addition, some of the statements in this Quarterly Report (including in the following discussion) constitute forward-looking statements, which relate to future events or the future performance or financial condition of Ares Core Infrastructure Fund (together with its consolidated subsidiaries, where applicable, the "Fund," "we," "us," or "our"). The forward-looking statements contained in this Quarterly Report involve a number of risks and uncertainties, including statements concerning:
•our, or our portfolio companies', future business, operations, operating results or prospects;
•the return or impact of current and future investments;
•the impact of a protracted decline in the liquidity of credit markets on our business;
•changes in the general economy, including those caused by tariffs and trade disputes with other countries, changes in inflation and risk of recession;
•fluctuations in global interest rates;
•the impact of changes in laws or regulations (including the interpretation thereof), including tax laws, governing our operations or the operations of our portfolio companies or the operations of our competitors;
•the valuation of our investments in portfolio companies, particularly those having no liquid trading market;
•our ability to recover unrealized losses;
•our ability to deploy any capital raised in our continuous private offering of securities (the "Private Offering");
•market conditions and our ability to access different debt markets and additional debt and equity capital and our ability to manage our capital resources effectively;
•our contractual arrangements and relationships with third parties;
•political and regulatory conditions that contribute to uncertainty and market volatility including the impact of any prolonged U.S. government shutdown as well as the legislative, regulatory, trade, immigration and other policies associated with the current U.S. presidential administration;
•the impact of supply chain constraints on our portfolio companies and the global economy;
•uncertainty surrounding global financial stability;
•ongoing conflicts in the Middle East, South America and the Russia-Ukraine war, including the potential for volatility in energy prices and other commodities and their impact on the industries in which we invest;
•the disruption of global shipping activities;
•an increase in negative global media coverage relating to the private credit industry and investment funds that conduct periodic repurchase offers;
•the financial condition of our current and prospective portfolio companies and their ability to achieve their objectives;
•the impact of information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity attacks;
•the impact of the development and use of artificial intelligence and potential impact to certain of our portfolio companies;
•the impact of global health crises on our or our portfolio companies' business and the U.S. and global economy;
•our ability to anticipate and identify evolving market expectations with respect to environmental, social and governance matters, including the environmental impacts of our portfolio companies' supply chain and operations;
•our ability to successfully complete and integrate any acquisitions;
•the outcome and impact of any litigation or regulatory proceedings;
•the adequacy of our cash resources and working capital;
•the timing, form and amount of any distributions;
•the timing of cash flows, if any, from the operations of our portfolio companies; and
•the ability of our Adviser (as defined below) to locate suitable investments for us and to monitor and administer our investments.
We use words such as "anticipates," "believes," "expects," "intends," "project," "estimates," "will," "should," "could," "would," "may" and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. Our actual results and condition could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in "Risk Factors" and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission (the "SEC") on March 5, 2026 (the "Annual Report") and in this Quarterly Report.
We have based the forward-looking statements included in this Quarterly Report on information available to us on the filing date of this Quarterly Report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
Overview
We are an externally managed, closed-end management investment company, formed as a Delaware statutory trust on May 7, 2024; we have elected to be regulated (the "BDC Election") as a business development company ("BDC") under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the "1940 Act") on December 2, 2024.
We elected to be treated as an association taxable as a corporation for U.S. federal income tax purposes. Accordingly, we are subject to U.S. federal income tax on our net income (regardless of whether such income is U.S. source) at the rates applicable to corporations without deduction for any distributions to the investors.
We hold monthly closings for our Private Offering, in connection with which we issue Shares to our investors for immediate cash investment in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the "1933 Act"). We reserve the right to conduct additional offerings of securities in the future in addition to the Private Offering. In addition, although we intend to issue Shares on a monthly basis, we also retain the right, if determined by us in our sole discretion, to accept subscriptions and issue Shares, in amounts to be determined by us, more or less frequently to one or more investors for regulatory, tax or other reasons.
Subject to the overall supervision of the Board of Trustees (the "Board"), we are externally managed by Ares Capital Management II LLC (our "Adviser"), a subsidiary of Ares Management Corporation ("Ares Management" or "Ares"), a publicly traded, leading global alternative investment manager, pursuant to our investment advisory and management agreement (the "Investment Advisory Agreement"). Our Adviser is responsible for sourcing potential investments, conducting due diligence on prospective investments, analyzing investment opportunities, structuring investments and monitoring our portfolio on an ongoing basis. Our Adviser is registered as an investment adviser with the SEC. Our administrator, Ares Operations LLC ("Ares Operations" or the Fund's "Administrator"), a subsidiary of Ares Management, provides certain administrative and other services necessary for us to operate.
Our investment objective is to generate attractive risk-adjusted total returns consisting primarily of current income and secondarily of capital appreciation. We invest in infrastructure companies and assets ("Infrastructure Assets"). We define Infrastructure Assets as investments in equity and debt interests in infrastructure-related assets or businesses, including investments in the power generation (such as renewable energy and thermal power plants), renewable natural gas, liquified natural gas, transportation, telecommunications, digital infrastructure (such as data centers, fiber optic cables and cell phone towers), midstream and energy infrastructure, regulated utilities, social infrastructure (such as water treatment and management, waste management and recycling) and environmental services (such as carbon capture and storage, soil and air remediation and climate change mitigation) sectors. Within Infrastructure Assets, we focus primarily on investing in Core Infrastructure Assets,
which are Infrastructure Assets that we believe could: (i) possess a higher degree of cash flow predictability; (ii) produce returns that are derived primarily from income, with limited upside through capital gains and assets that are commonly held for longer terms (more than five years); and (iii) produce revenues and cash flows that are generally predictable as a result of being governed by either rate regulation by governmental agencies or by long-term contractual arrangements with creditworthy counterparties, such as governments, municipalities and major companies, which can shield these assets from near-term economic and market trends ("Core Infrastructure Assets").
We focus on equity, and to a lesser extent, debt, investments with allocations in both controlling (majority) and non-controlling (minority) equity investments, as deemed appropriate by our Adviser. Our investments may include common or preferred stock, warrants or options, first lien senior secured loans, second lien senior secured loans, subordinated secured and unsecured loans, subordinated debt, distressed securities and convertible securities. For cash management and other purposes, we may also invest in broadly syndicated loans and other more liquid credit investments, including in publicly traded debt instruments and other instruments that are not directly originated, as well as equity investments and other investment companies such as exchange-traded funds. Under normal circumstances, we intend to invest at least 80% of our net assets, plus the amount of any borrowings for investment purposes, in assets and companies that derive at least 50% of their revenue from Infrastructure Assets and/or devote at least 50% of their assets to Infrastructure Assets (the "Investment Policy"). Shareholders will be provided with 60 days' notice in the manner prescribed by the SEC in the event of any change to the Investment Policy.
To seek to enhance our returns, we employ leverage as market conditions permit and at the discretion of our Adviser, but in no event will leverage employed exceed the limitations set forth in the 1940 Act. Effective December 2, 2024, our initial shareholders and the Board have approved a proposal that allows us to reduce our minimum asset coverage ratio to 150%. We have used and intend to continue to use leverage in the form of borrowings, including loans from certain financial institutions, including the Revolving Credit Facilities (as defined herein) and the Investment Credit Facilities (as defined herein) and any potential borrowings under any future credit facilities and the issuance of debt securities. We may also use leverage in the form of the issuance of preferred shares, but do not currently intend to do so. In determining whether to borrow money, we analyze the maturity, covenant package and rate structure of the proposed borrowings as well as the risks of such borrowings compared to our investment outlook. Any such leverage, if incurred, would be expected to increase the total capital available for investment by us.
As a BDC, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in "qualifying assets," including securities and indebtedness of private U.S. companies and certain public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. We also may invest up to 30% of our portfolio in non-qualifying assets, as permitted by the 1940 Act. Specifically, as part of this 30% basket, we may invest in entities that are not considered "eligible portfolio companies" (as defined in the 1940 Act), including companies located outside of the United States, entities that are operating pursuant to certain exceptions under the 1940 Act, and publicly traded entities whose public equity market capitalization exceeds the levels provided for under the 1940 Act. In addition, our Adviser and certain of our affiliates have received the Co-Investment Exemptive Order from the SEC permits us and other BDCs and registered closed-end management investment companies managed by Ares Management and its affiliates to co-invest in portfolio companies with each other and with affiliated investment entities (the "Co-Investment Exemptive Order"). As required by the Co-Investment Exemptive Order, we have adopted, and our Board has approved, policies and procedures reasonably designed to ensure compliance with the terms of the Co-Investment Exemptive Order, and our Adviser and our Chief Compliance Officer will provide reporting to our Board. Co-investments made under the Co-Investment Exemptive Order are subject to compliance with certain conditions and other requirements, which could limit our ability to participate in a co-investment transaction. As a result of investments permitted by the Co-Investment Exemptive Order, there could be significant overlap in our investment portfolio and the investment portfolio of affiliated Ares Management entities that can rely on the Co-Investment Exemptive Order and have an investment objective similar to ours. We may also otherwise co-invest with funds managed by Ares Management or any of its downstream affiliates, subject to compliance with existing regulatory guidance, applicable regulations and our Adviser's allocation policy.
Trends Affecting Our Business
Infrastructure investment opportunities in the Core Infrastructure Sector continue to be supported by demand catalysts. Growing AI adoption and digitalization is driving accelerated demand for digital infrastructure such as data centers and the corresponding power infrastructure needed to power them. Re-industrialization and electrification are further fueling power demand growth, and the resurgence in power demand growth has supported elevated contract prices for power generation resources and continued deployment of power generation assets. This dynamic has also benefited existing generation assets, which have generally increased in value. The deployment of new power generation assets is increasingly focused on reliable, baseload generation such as thermal generation and nuclear as part of an "all-of-the-above" power solution. Renewable energy assets continue to represent the majority of new generation supply additions and renewable energy transaction volumes have
remained strong. Midstream transaction activity has increased, driven by structural demand growth from expanding LNG export capacity and rapidly increasing power demand. These dynamics have tightened takeaway capacity from core gas production zones, supporting improved fundamentals for natural gas gathering, processing and transmission infrastructure, and are underpinning new infrastructure investment.
Portfolio and Investment Activity
Our investment activity is presented below ($ in thousands):
Three months ended June 30, Six months ended June 30,
2026 2025 2026 2025
New investment commitments:
Common equity $ 2,214,648 $ - $ 2,301,609 $ 402,870
Other equity 500,000 - 500,000 -
Preferred equity 1,000,000 - 1,000,000 -
First lien senior secured loans 300,472 145,315 404,016 168,909
Treasuries - 98,945 421,374 98,945
Senior subordinated loans - - - -
Total new investment commitments $ 4,015,120 $ 244,260 $ 4,626,999 $ 670,724
Amount of investments funded: (1)
Common equity $ 2,338,892 $ - $ 2,444,327 $ 402,870
Other equity 27,500 - 27,500 -
Preferred equity 1,000,000 - 1,000,000 -
First lien senior secured loans 162,511 98,259 534,719 98,259
Treasuries - 98,945 421,374 98,945
Senior subordinated loans 139,082 - 192,530 -
Total amount of investments funded $ 3,667,985 $ 197,204 $ 4,620,450 $ 600,074
Principal amount of investments sold or repaid:
Common equity $ (22,826) $ - $ (26,218) $ -
Other equity (4,038) (188) (14,124) (6,536)
Preferred equity - - - -
First lien senior secured loans (101,308) (20,696) (120,178) (20,754)
Treasuries (423,976) - (423,976) -
Senior subordinated loans - - - -
Total principal amount of investment sold or repaid $ (552,148) $ (20,884) $ (584,496) $ (27,290)
(1)The amount of investments funded in the table excludes purchases of investments during the respective period that had not settled as of the end of the period.
For the six months ended June 30, 2026, we committed to and closed four equity investments.
Our investments consisted of the following ($ in thousands):
As of
June 30, 2026 December 31, 2025
Total Underlying Projects (11)
Cost Fair Value Cost Fair Value
Denali Equity Holdings, LLC (1)
15 $ 326,871 $ 355,674 $ 340,995 $ 354,399
Aspen Renewables Equity Holdings, LLC (2)
4 432,390 497,688 431,267 479,667
Tango Holdings, LLC (3)
6 650,351 720,449 492,623 526,684
Meade Pipeline Co LLC (4)
1 210,937 222,630 202,888 214,956
Redwood Meade Midstream MPC, LLC (4)
N/A 36,879 38,943 35,459 37,589
Pioneer JV Holdings LLC (5)
9 717,332 779,787 731,872 753,613
Sierra Equity Holdings LLC (6)
3 446,141 474,839 155,587 155,587
AEJV SPV LP (7)
3 370,204 369,819 - -
Commonwealth LNG Intermediate Parent, LLC (8)
1 1,014,621 1,014,621 - -
ET Rover Pipeline LLC (9)
1 1,616,034 1,606,429 - -
Sunrun Acropolis Owner 2026, LLC (10)
1 37,789 38,033 - -
Senior subordinated loans N/A 283,316 285,377 90,449 89,618
First lien senior secured loans N/A 924,292 925,807 507,515 508,273
Total $ 7,067,157 $ 7,330,096 $ 2,988,655 $ 3,120,386
(1)The underlying 2.6 gigawatt portfolio consists of 15 projects in operation across Electric Reliability Council of Texas, Midcontinent Independent System Operator, PJM and Southwest Power Pool, of which 53% is solar, 25% is wind and 22% is co-located battery storage capacity.
(2)The underlying 0.9 gigawatt portfolio consists of 4 projects in the Electric Reliability Council of Texas and the Midcontinent Independent System Operator, of which 83% is solar and 17% is co-located battery storage capacity.
(3)The underlying 0.7 gigawatt portfolio consists of 6 projects across the Pennsylvania-New Jersey-Maryland Interconnection, the Southwest Power Pool, and the Electric Reliability Council of Texas regions, of which 100% is solar capacity.
(4)Represents an investment in an entity holding a ~40% interest in the Central Penn Line, a fully contracted natural gas pipeline transporting gas from Northeast to Southeastern Pennsylvania via the Transco system. The pipeline spans 178 miles and has a total capacity of 3,380 MMcf/d, with ~1,332 MMcf/d net to Meade, under long-term triple net leases through 2042. Redwood Meade Midstream MPC, LLC is a holding company that structurally owns a minority interest in Meade Pipeline Co LLC.
(5)The underlying 1.5 gigawatt portfolio consists of 9 projects in operation across the Midcontinent Independent System Operator, Electric Reliability Council of Texas, Western Electricity Coordinating Council, and Pennsylvania-New Jersey-Maryland Interconnection (PJM), of which 61% is solar, 26% is wind, and 13% is battery storage capacity.
(6)The underlying 0.7 gigawatt portfolio consists of 3 projects in the Electric Reliability Council of which 63% is solar and 37% is wind capacity.
(7)An entity holding, directly or indirectly, a 99% stake in thirty-two aircraft engines, each on lease to North American airlines.
(8)Represents an investment in a ~9.3 mtpa liquefied natural gas export facility under construction in Louisiana. The asset will be ~91% contracted under long-term take-or-pay Sale and Purchase Agreements with creditworthy counterparties upon reaching commercial operation.
(9)Represents an investment in an entity holding a ~32.4% stake in the Rover pipeline, a ~713-mile interstate natural gas pipeline that transports Appalachian Basin gas from Ohio and West Virginia westward into the Midwest and onward to the US / Canada border with transportation capacity of 3.425 Bcf/d that is substantially contracted under long-term agreements.
(10)The underlying portfolio consists of approximately 4,289 residential solar and storage systems across 18 states and Puerto Rico, totaling ~33 MW of capacity. When fully deployed, the portfolio is expected to consist of over 70,000 systems with approximately 600 MW of total generation capacity across 21 states and Puerto Rico.
(11)Represents the number of infrastructure projects undertaken by each entity in which we have an equity investment as of June 30, 2026.
Components of our Results of Operations
Revenues
We generate revenue in the form of interest income, from bank interest or interest from loans, and distribution income, by investing primarily in Core Infrastructure Assets, including investments in the power generation (such as renewable energy and thermal power plants), renewable natural gas, liquified natural gas, transportation, telecommunications, digital infrastructure (such as data centers, fiber optic cables and cell phone towers), midstream and energy infrastructure, regulated utilities, social infrastructure (such as water treatment and management, waste management and recycling) and environmental services (such as carbon capture and storage, soil and air remediation and climate change mitigation) sectors.
Expenses
The services of all investment professionals of our Adviser and its staff, when and to the extent engaged in providing investment advisory services to us and the compensation and routine overhead expenses of such personnel allocable to such services, are provided and paid for by our Adviser. Under the Investment Advisory Agreement, we bear all other costs and
expenses of our operations and transactions. See "Note 3. Agreements and Organizational Documents" to our unaudited consolidated financial statements for more information on fees and expenses.
From time to time, our Adviser, our Administrator or their affiliates may pay third-party providers of goods or services. We will reimburse our Adviser, our Administrator or such affiliates thereof for any such amounts paid on our behalf. From time to time, our Adviser or our Administrator may defer or waive fees and/or rights to be reimbursed for expenses.
Expense Support and Conditional Reimbursement Agreement
We have entered into an amended and restated expense support and conditional reimbursement agreement (the "Expense Support and Conditional Reimbursement Agreement"), with our Adviser, pursuant to which our Adviser may elect to pay certain of our expenses on our behalf. The Adviser has agreed to advance a portion of our organization, initial offering and operational expense, which includes our organization and initial offering expenses incurred in connection with the Private Offering through the date of the BDC Election. See "Note 3. Agreements and Organizational Documents" and "Note 7. Commitments and Contingencies" to our unaudited consolidated financial statements for more information on the Expense Support and Conditional Reimbursement Agreement.
Results of Operations
Operating results for the three and six months ended June 30, 2026 and 2025 were as follows ($ in thousands):
Three months ended June 30, Six months ended June 30,
2026 2025 2026 2025
Total income $ 118,244 $ 14,011 $ 183,263 $ 15,075
Net expenses 78,194 10,711 110,966 17,412
Net investment income/(loss) before income taxes 40,050 3,300 72,297 (2,337)
Income tax benefit/(expense) 15,408 (5,635) 11,884 (7,989)
Net investment income/(loss) 55,458 (2,335) 84,181 (10,326)
Net realized and unrealized gains on investments and derivatives 43,204 21,652 69,443 37,715
Net increase in stockholders' equity resulting from operations $ 98,662 $ 19,317 $ 153,624 $ 27,389
Net increase in stockholders' equity resulting from operations can vary substantially from period to period due to various factors, including but not limited to the level of new investment commitments, the recognition of realized gains and losses and unrealized appreciation and depreciation.
Income
Three months ended June 30, Six months ended June 30,
2026 2025 2026 2025
Income
Distribution income $ 76,945 $ 10,818 $ 104,201 $ 10,818
Interest income 26,299 3,193 49,062 4,257
Other income 15,000 - 30,000 -
Total income $ 118,244 $ 14,011 $ 183,263 $ 15,075
For the three and six months ended June 30, 2026, distribution income increased by $66.1 million and $93.4 million, respectively, compared to the same period in 2025 due to the increase in the portfolio of income yielding investments.
For the three and six months ended June 30, 2026, interest income increased by $23.1 million and $44.8 million, respectively, compared to the same period in 2025 primarily due to the building of a liquid and private credit portfolio in 2025 and 2026.
For the three and six months ended June 30, 2026, other income increased by $15.0 million and $30.0 million, respectively, compared to the same period in 2025 due to receipt of a commitment fee in 2026. Other income also increased for the six months ended June 30, 2026 compared to the same period in 2025 due to a deal termination fee.
For the three and six months ended June 30, 2026, we received $89.2 million and $129.9 million, respectively, of distributions from common and other equity investments, of which $26.9 million and $40.3 million, respectively, were classified as a return of capital. For the three and six months ended June 30, 2025, we received $11.0 million and $17.4 million, respectively, of distributions from common and other equity investments, of which $0.2 million and $6.6 million, respectively, were classified as a return of capital. Because our common and other equity investments are in private portfolio companies, there is no recognition of distribution income by us for the income generated by the underlying portfolio companies during the quarter, with such income recognized by us when the distribution is declared by the portfolio company, typically in the following quarter.
For the three and six months ended June 30, 2026, we accrued $14.6 million of PIK distribution income from our preferred equity investment.
Operating Expenses
Three months ended June 30, Six months ended June 30,
2026 2025 2026 2025
Expenses
Interest expense $ 36,608 $ 5,203 $ 53,273 $ 9,171
Management fees 13,089 2,651 21,565 3,533
Income based incentive fee 11,385 - 13,368 -
Capital gains incentive fee 4,032 2,707 5,043 4,715
Administration fees 1,637 646 2,505 1,498
Offering expense 233 1,187 735 2,204
Shareholder servicing and distribution fees:
Class S 542 - 795 -
Class D 16 - 17 -
Class N 484 - 484 -
Organizational expenses - 4 - 35
Legal expenses 819 761 4,994 1,528
Other general and administrative 1,651 220 3,120 467
Total expenses 70,496 13,379 105,899 23,151
Less: Expense support (4,248) (2,668) (6,879) (5,576)
Add: Expense support recoupment 11,946 - 11,946 -
Less: Management fee waiver - - - (163)
Net expenses 78,194 10,711 110,966 17,412
Net investment income/(loss) before income taxes 40,050 3,300 72,297 (2,337)
Income tax benefit/(expense) 15,408 (5,635) 11,884 (7,989)
Net investment income/(loss) $ 55,458 $ (2,335) $ 84,181 $ (10,326)
For the three and six months ended June 30, 2026, interest expense increased by $31.4 million and $44.1 million, respectively, compared to the same period in 2025 due to the additional debt entered into in 2025 and 2026.
For the three and six months ended June 30, 2026, the income based incentive fee increased by $11.4 million and $13.4 million, respectively, compared to the same period in 2025 mainly due to the increase in pre-incentive fee net investment income, as defined in our Investment Advisory Agreement.
For the three and six months ended June 30, 2026, management fees increased by $10.4 million and $18.0 million, respectively, compared to the same period in 2025 due to the increase in net assets primarily as a result of our continuous offering of common shares.
For the three and six months ended June 30, 2026, expenses payable as reimbursements under the Expense Support and Conditional Reimbursement Agreement increased by $11.9 million mainly due to the increase in Excess Operating Funds, as defined in the Expense Support and Conditional Reimbursement Agreement.
For the three and six months ended June 30, 2026, capital gains incentive fee increased by $1.3 million and $0.3 million, respectively, compared to the same period in 2025 due to the net unrealized gains on the Fund's investments in the current period, offset by the increase in the deferred tax liability, net. The capital gains incentive fee accrued under GAAP includes an accrual related to unrealized capital appreciation, whereas the capital gains incentive fee actually payable under our Investment Advisory Agreement does not. There can be no assurance that such unrealized capital appreciation will be realized in the future. The accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. As of June 30, 2026, there was $16.4 million of capital gains incentive fee accrued in accordance with GAAP. As of June 30, 2026, there was no capital gains incentive fee actually payable under our Investment Advisory Agreement.
For the three and six months ended June 30, 2026, income tax benefit increased by $21.0 million and $19.9 million, respectively, compared to the same period in 2025 mainly due to the increase in tax net operating loss in the current period.
See "Note 3. Agreements and Organizational Documents" to our consolidated financial statements for the three and six months ended June 30, 2026 and 2025, for more information on the base management fee, income-based fee and capital gains incentive fee.
Realized and Unrealized Gains/(Losses) on Investments and Derivatives
Three months ended June 30, Six months ended June 30,
2026 2025 2026 2025
Realized and unrealized gains/(losses) on investment and derivatives
Net realized gains/(losses):
Investments $ (122) $ (160) $ (39) $ (160)
Derivatives (193) 405 (81) 1,324
Net realized gains (315) 245 (120) 1,164
Net unrealized gains/(losses):
Investments 89,904 22,580 131,208 42,702
Derivatives 252 (1,173) 2,491 (6,151)
Income tax expense (46,637) - (64,136) -
Net unrealized gains 43,519 21,407 69,563 36,551
Net realized and unrealized gains on investments and derivatives $ 43,204 $ 21,652 $ 69,443 $ 37,715
For the three and six months ended June 30, 2026, net unrealized gains on investments increased by $67.3 million and $88.5 million, respectively, compared to the same period in 2025 due to the net increase in fair value of the portfolio's investments.
For the three and six months ended June 30, 2026, income tax expense increased by $46.6 million and $64.1 million, respectively, compared to the same period in 2025 mainly due to an increase in the deferred tax liability on investments.
For the six months ended June 30, 2026, the cost basis of investments increased from $2,988.7 million to $7,067.2 million and the number of equity investments increased from seven to eleven.
Financial Condition, Liquidity and Capital Resources
Our current liquidity and capital resources are generated primarily from the proceeds received from the sale of our Shares pursuant to our Private Offering at a price per Share equal to the then-current NAV per Share and cash flows from our operations. Further, we expect to generate additional liquidity and capital resources from the net proceeds of the Private Offering and, any future offerings of our debt or equity securities, and any financing arrangements we may enter into in the future. We believe we have sufficient liquidity to operate our business, with $333.9 million of immediate liquidity as of June 30, 2026, comprised of cash and cash equivalents. In addition to our immediate liquidity, as of June 30, 2026, we had approximately $838.0 million available for borrowing through our credit arrangements which are subject to various draw covenants.
Our primary uses of cash and cash equivalents are for (i) investments in portfolio companies and other investments, (ii) the cost of operations (including paying our Adviser and our Administrator), (iii) cost of any borrowings or other financing arrangements, if any and (iv) cash distributions to the holders of our Shares.
In accordance with the 1940 Act, we may borrow amounts such that our asset coverage calculated pursuant to the 1940 Act, is at least 150% (or 200% if certain requirements under the 1940 Act are not met) immediately after such borrowing (i.e., we are able to borrow up to two dollars for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us). As of June 30, 2026, we had $2,370.3 million in total aggregate principal debt outstanding, $7,689.0 million of total assets, $288.6 million of liabilities (other than indebtedness) and our asset coverage ratio was 312%.
We have commenced a Share repurchase program, pursuant to which we intend to offer to repurchase, at the discretion of our Board, up to 5% of our Shares outstanding in each quarter. We may from time to time seek to retire or repurchase our Shares through cash purchases, as well as retire, cancel or purchase any of our outstanding debt through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions or otherwise. The amounts involved may be material. In addition, we may from time to time enter into new debt facilities, increase the size of existing facilities or issue debt securities, including secured debt, unsecured debt and/or debt securities convertible into common stock. Any such purchases or exchanges of our Shares or outstanding debt, or incurrence or issuance of additional debt would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors.
Equity Capital Activities
We hold monthly closings for our Private Offering, in connection with which we will issue Shares to investors for immediate cash investment. Each of our closings in connection with the Private Offering will be conducted in reliance on exemptions from the registration requirements of the 1933 Act, including the exemption provided by Section 4(a)(2) of the 1933 Act and Regulation D promulgated thereunder, and other exemptions from the registration requirements of the 1933 Act. We reserve the right to conduct additional offerings of securities in the future in addition to the Private Offering. In addition, although we intend to issue Shares on a monthly basis, we also retain the right, if determined in our sole discretion, to accept subscriptions and issue Shares, in amounts to be determined by us, more or less frequently to one or more investors for regulatory, tax or other reasons.
The following table summarizes transactions in Shares during the three and six months ended June 30, 2026:
Three months ended June 30, 2026 Six months ended June 30, 2026
Shares Amount Shares Amount
Class I
Subscriptions 36,860,617 $ 918,284 74,094,487 $ 1,849,033
Distributions reinvested 1,029,774 25,652 1,737,680 43,346
Share transfers between classes - - 9,984 249
Repurchased shares (193,377) (4,822) (851,733) (21,230)
Early repurchase deduction - 49 - 82
Dividends declared and payable - (89,025) - (155,246)
Net increase 37,697,014 850,138 74,990,418 1,716,234
Class S
Subscriptions 5,445,048 135,631 10,108,455 252,184
Distributions reinvested 79,082 1,970 111,959 2,791
Share transfers between classes - - - -
Repurchased shares (5,990) (149) (5,990) (149)
Early repurchase deduction - 5 - 5
Dividends declared and payable - (5,878) - (8,645)
Net increase 5,518,140 131,579 10,214,424 246,186
Class D
Subscriptions 2,012,039 50,100 2,012,039 50,100
Distributions reinvested 3,749 93 4,149 103
Share transfers between classes - - (9,984) (249)
Repurchased shares - - - -
Early repurchase deduction - - - -
Dividends declared and payable - (666) - (680)
Net increase 2,015,788 49,527 2,006,204 49,274
Class N
Subscriptions 31,245,411 778,175 31,245,411 778,175
Distributions reinvested 49,353 1,230 49,353 1,230
Share transfers between classes - - - -
Repurchased shares - - - -
Early repurchase deduction - 5 - 5
Dividends declared and payable - (9,254) - (9,254)
Net increase 31,294,764 770,156 31,294,764 770,156
Total net increase 76,525,706 1,801,400 118,505,810 2,781,850
(1) See "Recent Developments" as well as "Note 13. Subsequent Events" to our unaudited consolidated financial statements for subsequent events relating to subscription activities.
NAV Per Share and Offering Price
We determine NAV for our Shares as of the last day of each calendar month. Share issuances related to monthly subscriptions are effective the first business day of each month. The following table summarizes each month-end NAV per Share for the six months ended June 30, 2026:
NAV Per Share
Class I Class S Class D Class N
January 31, 2026 $ 25.0263 $ 25.0263 $ 25.0263 N/A
February 28, 2026 24.9252 24.9252 24.9252 N/A
March 31, 2026 24.9176 24.9176 24.9176 N/A
April 30, 2026 24.8805 24.8805 24.8805 N/A
May 31, 2026 24.9295 24.9295 24.9295 24.9295
June 30, 2026 24.8841 24.8841 24.8841 24.8841
Distributions
We have declared distributions each month beginning December 2024 and, to the extent that we have excess cash flows, we intend to continue making monthly distributions to our shareholders. Distributions to our shareholders are recorded on the record date. All distributions will be paid at the sole discretion of the Board and will depend on our earnings, financial condition, tax considerations, compliance with applicable BDC regulations and such other factors as the Board may deem relevant from time to time.
The following tables present our distributions that were declared and payable for the six months ended June 30, 2026 ($ in thousands, except per Share amount):
Class I
Declaration Date Record Date Payment Date Net Distribution per Share Distribution Amount
November 07, 2025 January 30, 2026 February 23, 2026 $ 0.20830 $ 19,140
November 07, 2025 February 27, 2026 March 25, 2026 0.20830 22,271
November 07, 2025 March 31, 2026 April 23, 2026 0.20830 24,810
March 05, 2026 April 30, 2026 May 21, 2026 0.20830 27,068
March 05, 2026 May 29, 2026 June 24, 2026 0.20830 29,293
March 05, 2026 June 30, 2026 July 23, 2026 0.20830 32,664
$ 1.24980 $ 155,246
Class S
Declaration Date Record Date Payment Date Net Distribution per Share Distribution Amount
November 07, 2025 January 30, 2026 February 23, 2026 $ 0.19022 $ 635
November 07, 2025 February 27, 2026 March 25, 2026 0.19198 898
November 07, 2025 March 31, 2026 April 23, 2026 0.19031 1,234
March 05, 2026 April 30, 2026 May 21, 2026 0.19089 1,626
March 05, 2026 May 29, 2026 June 24, 2026 0.19034 1,752
March 05, 2026 June 30, 2026 July 23, 2026 0.19088 2,500
$ 1.14462 $ 8,645
Class D
Declaration Date Record Date Payment Date Net Distribution per Share Distribution Amount
November 07, 2025 January 30, 2026 February 23, 2026 $ 0.20298 $ 5
November 07, 2025 February 27, 2026 March 25, 2026 0.20350 5
November 07, 2025 March 31, 2026 April 23, 2026 0.20301 4
March 05, 2026 April 30, 2026 May 21, 2026 0.20318 4
March 05, 2026 May 29, 2026 June 24, 2026 0.20302 239
March 05, 2026 June 30, 2026 July 23, 2026 0.20318 423
$ 1.21887 $ 680
Class N
Declaration Date Record Date Payment Date Net Distribution per Share Distribution Amount
November 07, 2025 January 30, 2026 February 23, 2026 $ - $ -
November 07, 2025 February 27, 2026 March 25, 2026 - -
November 07, 2025 March 31, 2026 April 23, 2026 - -
March 05, 2026 April 30, 2026 May 22, 2026 - -
March 05, 2026 May 30, 2026 June 25, 2026 0.19773 2,736
March 05, 2026 June 30, 2026 July 23, 2026 0.19805 6,518
$ 0.39578 $ 9,254
(1) See "Recent Developments" as well as "Note 13. Subsequent Events" to our unaudited consolidated financial statements for a subsequent event relating to regular distributions declared by our Board.
Distribution Reinvestment Plan
We have adopted a distribution reinvestment plan, pursuant to which we reinvest cash distributions declared by us on behalf of our shareholders unless such shareholders elect for their distributions not to be automatically reinvested. As a result, if the Board authorizes, and we declare, a cash distribution, then our shareholders who have not opted out of our distribution reinvestment plan will have their cash distributions automatically reinvested in additional Shares, rather than receiving the cash distribution. Distributions on fractional Shares will be credited to each participating shareholder's account. The purchase price for Shares issued under our distribution reinvestment plan will be equal to the most recent available NAV per Share for such Shares at the time the distribution is payable.
Share Repurchase Program
We have commenced a Share Repurchase Program pursuant to which we intend to offer to repurchase, at the discretion of our Board, up to 5% of our Shares outstanding (either by number of Shares or aggregate NAV) as of the close of the previous calendar quarter. We may from time to time seek to retire or repurchase our Shares through cash purchases, as well as retire, cancel or purchase any of our outstanding debt through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions or otherwise. The amounts involved may be material.
In accordance with the Share Repurchase Program, Shares repurchased in our tender offer completed during the three months ended June 30, 2026 were repurchased using a purchase price equal to the NAV per Share as of the last calendar day of the applicable month designated by the Board, except that we deducted 2.00% from such NAV for Shares that were not outstanding for at least one year.
We adopted a plan pursuant to Rule 18f-3 under the Investment Company Act so that we may issue multiple classes of Shares (the "Multiple Class Plan"), which provides that the Early Repurchase Deduction holding period ends on the one-year anniversary of the subscription closing date and the Early Repurchase Deduction will not apply to Shares acquired through our distribution reinvestment plan. The Early Repurchase Deduction may be waived in the case of repurchase requests: (i) arising from the death or qualified disability of the holder; (ii) due to trade or operational errors; (iii) submitted by discretionary model portfolio management programs (and similar arrangements); (iv) from feeder funds (or similar vehicles) primarily created to hold our Shares, which are offered to non-U.S. persons, where such funds seek to avoid imposing such a deduction because of administrative or systems limitations; and (v) in the event that a shareholder's Shares are repurchased because the shareholder has failed to maintain a minimum account balance. The Early Repurchase Deduction is retained by us for the benefit of remaining shareholders.
The following table presents the Share repurchases completed during the six months ended June 30, 2026 (dollar amounts in thousands except per Share amounts):
Repurchase Pricing Date Total Number of Shares Repurchased
Percentage of Outstanding Shares Repurchased (1)
Repurchase Request Deadline Purchase Price Per Share
Amount Repurchased (All Classes) (2)
Maximum number of shares that may yet be purchased under the repurchase program (3)
February 27, 2026 658,356 0.59 % March 20, 2026 $ 24.9252 $ 16,375 -
May 29, 2026 199,367 0.14 % June 18, 2026 24.9295 4,912 -
(1) Percentage is based on total Shares outstanding as of the close of business on the last calendar day of the month preceding the applicable repurchase pricing date.
(2) Amount shown net of the Early Repurchase Deduction.
(3) All repurchase requests were satisfied in full.
Credit Agreements
The following table summarizes the average outstanding amount and rate for each of our credit agreements for the three and six months ended June 30, 2026 and 2025:
Three months ended June 30,
Six months ended June 30,
2026 2025 2026 2025
Maturity Date Average Outstanding Amount Average Rate Average Outstanding Amount Average Rate Average Outstanding Amount Average Rate Average Outstanding Amount Average Rate
Denali Credit Agreement 09/2029 $ 204,988 5.63 % $ 211,611 6.34 % $ 205,753 5.66 % $ 212,055 6.35 %
Aspen Credit Agreement 03/2030 224,481 5.26 50,000 6.10 224,481 5.33 30,111 3.67
ACI Portfolio Aggregator Credit Agreement 04/2027 79,835 6.22 - - 50,083 6.24 - -
Tango Credit Agreement 07/2030 273,761 5.14 - - 229,501 5.15 - -
BNP Funding Facility 03/2028 200,000 4.92 - - 200,000 4.92 - -
Pioneer Credit Agreement 10/2030 314,160 5.13 - - 270,323 5.15 - -
Rover Credit Agreement 06/2033 720,855 5.94 - - 362,419 5.94 - -
Total $ 2,018,080 5.51 % $ 261,611 6.32 % $ 1,542,560 5.43 % $ 242,166 6.30 %
Denali Credit Agreement
Our indirect and direct wholly-owned subsidiaries ACI Denali Member, LLC and ACI Denali Holdings, LLC (together, "ACI Denali"), and Ares Denali Member, LLC (together with ACI Denali, the "Denali Co-Borrowers"), an affiliated entity managed by an affiliate of the Adviser, are party to a Credit Agreement (the "Denali Credit Agreement"), dated as of September 11, 2024, with MUFG Bank, LTD, as Administrative Agent ("MUFG"), and BNP Paribas, as Collateral Agent, the lenders from time to time party to the Denali Credit Agreement and certain other signatories thereto. T The Denali Credit Agreement is related to ACI Denali's investment in a portfolio company and ACI Denali's portion includes an amortizing $212.5 million term loan (the "Denali Term Loan"), of which $204.6 million was available and drawn as of June 30, 2026, and a $10.2 million debt service letters of credit facility ("Denali DSR LC Facility"), of which nothing was drawn as of June 30, 2026. As of December 31, 2025, $208.0 million was drawn on the Denali Term Loan and nothing was drawn on the Denali DSR LC Facility. The remaining portion of the Denali Credit Agreement and Denali DSR LC Facility are with Ares Denali Member, LLC. Outstanding borrowings under the Denali Term Loan bear interest annually at the Daily Compounded Secured Overnight Financing Rate ("SOFR") plus 2.00%, with a 0.125% step-up after three years. Since February 2025, ACI Denali has been making quarterly interest payments. The Denali DSR LC Facility is to provide letters of credit ("Denali LC") or loans for draws under such Denali LC to support contractual obligations related to the minimum debt service reserve amount under the Denali Credit Agreement. Denali LC fees are payable quarterly in arrears, at an amount equal to 0.5% multiplied by the stated amount of the Denali LC.
The Denali Credit Agreement is secured by a first-priority pledge on (a) all of the equity interests of the Denali Co-Borrowers, and (b) all tangible and intangible assets of the Denali Co-Borrowers. Under the Denali Credit Agreement, the Denali Co-Borrowers have made representations and warranties regarding their businesses, among other things, and are required to comply with various covenants, servicing procedures, reporting requirements and other customary requirements for similar facilities. The Denali Credit Agreement includes usual and customary events of default for facilities of this nature. Other than with respect to the pledge of the equity interests of the Denali Co-Borrowers, the Denali Credit Agreement is non-recourse to any upstream affiliate of the Denali Co-Borrowers, including to us.
Aspen Credit Agreement
On March 14, 2025, Ares Aspen Member LLC as borrower (the "Aspen Borrower") and Ares Aspen Holdings LLC as pledgor (the "Aspen Pledgor"), each our wholly-owned subsidiary, entered into a Credit Agreement (as amended, the "Aspen Credit Agreement") with MUFG, as Administrative Agent, and BNP Paribas, as Collateral Agent, the lenders from time to time party to the Aspen Credit Agreement and certain other signatories thereto. The Aspen Credit Agreement is related to the Aspen Borrower's investment in two portfolio companies of the Fund.
On March 13, 2026 (the "Aspen Amendment Effective Date"), the Aspen Borrower and the Aspen Pledgor entered into the First Amendment to the Aspen Credit Agreement (the "First Aspen Amendment").
The First Aspen Amendment, among other things, provides for an additional (a) $249.9 million delayed draw term loan, and (b) $16.1 million debt service letters of credit facility. After giving effect to the First Aspen Amendment, the Aspen Credit Agreement provides for an aggregate amortizing term loan facility of approximately $478.0 million (the "Aspen Term Loan"), of which $474.4 million was available and $224.5 million was drawn as of June 30, 2026, and a $31.7 million debt service letters of credit facility ("Aspen DSR LC Facility"), of which nothing was drawn as of June 30, 2026. As of
December 31, 2025, $224.5 million was drawn on the Aspen Term Loan and nothing was drawn on the Aspen DSR LC Facility. Pursuant to the terms of the First Aspen Amendment, the interest rate charged on outstanding borrowings under the Aspen Credit Agreement for the period from the Aspen Amendment Effective Date until March 14, 2028 decreased from SOFR plus 1.75% to SOFR plus 1.625%, with a 0.125% step-up after March 14, 2028 and outstanding undrawn commitments under the Aspen Term Loan have a commitment fee of 0.60% annually. In addition, pursuant to the terms of the First Aspen Amendment, the rate for Aspen DSR LC Facility fees under the Aspen Credit Agreement decreased from 1.725% to 1.625%, in each case multiplied by the stated amount of the applicable letter of credit and with a 0.125% step-up after March 14, 2028. Since August 2025, the Aspen Borrower has been making quarterly interest payments.
The Aspen Credit Agreement is secured by a first-priority pledge on (a) all of the equity interests of the Aspen Borrower, and (b) all tangible and intangible assets of the Aspen Borrower. Under the Aspen Credit Agreement, the Aspen Borrower and the Aspen Pledgor, as applicable, have made representations and warranties regarding their businesses, among other things, and are required to comply with various covenants, servicing procedures, reporting requirements and other customary requirements for similar facilities. The Aspen Credit Agreement includes usual and customary events of default for facilities of this nature. Other than with respect to the pledge of the equity interests of the Aspen Borrower, the Aspen Credit Agreement is non-recourse to any upstream affiliate of the Aspen Borrower, including to us.
ACI Portfolio Aggregator Credit Agreement
On April 14, 2025, ACI Portfolio Aggregator SPV LLC, as borrower ("ACI Portfolio Aggregator"), our wholly-owned subsidiary, entered into a Revolving Credit Agreement that provides a revolving line of credit (as amended, the "ACI Portfolio Aggregator Credit Agreement") by and among ACI Portfolio Aggregator, NatWest Markets Plc ("NatWest"), as administrative agent, and the lenders from time to time party thereto. On March 25, 2026 ACI Portfolio Aggregator increased the aggregate amount of total commitments available under the ACI Portfolio Aggregator Credit Agreement from $50.0 million to $200.0 million. There were $125.0 million and $20.0 million, respectively, in borrowings drawn on the ACI Portfolio Aggregator Credit Agreement as of June 30, 2026 and December 31, 2025.
Borrowings under the ACI Portfolio Aggregator Credit Agreement may take the form of base rate loans or SOFR loans, at the option of the ACI Portfolio Aggregator. Base rate loans will bear interest at a rate per annum equal to (a) the Base Rate (as defined in the ACI Portfolio Aggregator Credit Agreement), which is subject to a floor of 0.00% per annum, plus (b) an applicable margin of 1.60% per annum. SOFR loans will bear interest at a rate per annum equal to (a) Term SOFR (as defined in the ACI Portfolio Aggregator Credit Agreement) for a period of one, three or six months (as selected by ACI Portfolio Aggregator), subject to a floor of 0.00% per annum, plus (b) an applicable margin of 2.60% per annum. The $20.0 million amount outstanding was drawn as a SOFR loan.
The ACI Portfolio Aggregator Credit Agreement contains various representations and warranties, affirmative covenants, and negative covenants, which are typical for this type of revolving facility.
All obligations under the ACI Portfolio Aggregator Credit Agreement and the other loan documents are secured by a first priority perfected lien on, and security interest in, (i) all membership interests of ACI Portfolio Aggregator owned by us, including all proceeds thereof, and (ii) a certain collateral account of ACI Portfolio Aggregator, and all sums or other property now or at any time hereafter on deposit therein, subject to certain exceptions. Other than with respect to the pledge of the equity interests of the ACI Portfolio Aggregator, the ACI Portfolio Aggregator Credit Agreement is otherwise non-recourse to any upstream affiliate of ACI Portfolio Aggregator, including to us.
Tango Credit Agreement
On July 28, 2025, ACI Tango Member, LLC, as borrower ("ACI Tango"), and ACI Tango Holdings, LLC, as pledgor ("ACI Tango Holdings"), each our wholly-owned subsidiary, entered into a Credit Agreement (the "Tango Credit Agreement", with Canadian Imperial Bank of Commerce, New York Branch, as Administrative Agent ("CIBC"), U.S. Bank National Association, as Collateral Agent, the lenders from time to time party to the Tango Credit Agreement and certain other signatories thereto. The Tango Credit Agreement is related to ACI Tango's investment in one of our portfolio companies and includes an amortizing $334.8 million delayed draw term loan (the "Tango Term Loan"), of which $334.8 million was available and drawn as of June 30, 2026, and a $18.8 million debt service letters of credit facility ("Tango DSR LC Facility"), of which nothing was drawn as of June 30, 2026. As of December 31, 2025, $184.8 million was drawn on the Tango Term Loan and nothing was drawn on the Tango DSR LC Facility. Borrowings under the Tango Credit Agreement may take the form of Base Rate Loans (as defined in the Tango Credit Agreement) or SOFR loans, at the option of ACI Tango. Outstanding borrowings under the Tango Term Loan Facility bear interest annually at (i) for SOFR loans, the SOFR plus 1.50%, and (ii) for the Base Rate Loans, a fluctuating rate determined by reference to the Adjusted Base Rate (as defined in the Tango Credit Agreement) plus 0.50%, each with a 0.125% step-up after three years. The $184.8 million amount outstanding was drawn as a SOFR loan. Outstanding undrawn commitments under the Tango Term Loan Facility have a commitment fee of 0.50% annually. Since November 2025, ACI Tango has been making quarterly interest payments. The Tango DSR LC Facility provides letters of credit ("LC") or loans for draws under such LC to support contractual obligations related to the minimum debt service reserve amount under the Tango Credit Agreement. LC fees are payable quarterly in arrears, at an amount equal to 1.50% multiplied by the stated amount of the LC, with a 0.125% step-up after three years.
The Tango Credit Agreement is secured by a first-priority pledge on (a) all of the equity interests of ACI Tango, (b) all of the equity interests of Tango Holdings, LLC owned by ACI Tango and (c) all tangible and intangible assets of ACI Tango and the equity interests of ACI Tango owned by the ACI Tango Holdings. Under the Tango Credit Agreement, ACI Tango and ACI Tango Holdings, as applicable, have made representations and warranties regarding their businesses, among other things, and are required to comply with various covenants, servicing procedures, reporting requirements and other customary requirements for similar facilities. The Tango Credit Agreement includes usual and customary events of default for facilities of this nature. Other than with respect to the pledge of the equity interests of ACI Tango, the Tango Credit Agreement is non-recourse to any upstream affiliate of ACI Tango, including to us.
BNP Funding Facility and Contribution Agreement
On September 23, 2025, we entered into a Revolving Credit and Security Agreement as amended, (the "BNP Funding Facility", and together with the ACI Portfolio Aggregator Credit Agreement, the "Revolving Credit Facilities") with ACI Liquid Aggregator SPV, LLC ("ACI Liquid Aggregator"), our wholly owned subsidiary, as borrower (the "BNP Borrower"), us, as equityholder and servicer, the lenders from time to time party thereto, BNP Paribas, as administrative agent, and U.S. Bank Trust Company, National Association, as collateral agent. The BNP Funding Facility has a reinvestment period ending on September 23, 2027 and a maturity date of March 23, 2028. On June 26, 2026, ACI Liquid Aggregator increased the aggregate amount of total commitments available under the BNP Funding Facility from $200.0 million to (i) a $375.0 million tranche secured by broadly syndicated loans and (ii) a tranche secured by data center loans with a maximum facility amount equal to the lesser of (a) $175.0 million and (b) the sum of the products obtained by multiplying (x) the advance rate of each eligible data center collateral asset by (y) the data center commitment amount of such data center collateral asset. In addition, on September 23, 2025, the Fund, as transferor, and the BNP Borrower, as transferee, entered into a Contribution Agreement, pursuant to which we will transfer to the BNP Borrower certain originated or acquired loans and related assets (collectively, the "BNP Loans") from time to time.
The obligations of the BNP Borrower under the BNP Funding Facility are secured by substantially all assets held by the BNP Borrower, including the BNP Loans. The interest rate charged on the BNP Funding Facility is based on SOFR plus an applicable margin of 1.25%. Advances under the tranche secured by data center loans bear interest at a rate equal to SOFR Rate (as defined in the BNP Funding Facility) plus an applicable margin of 1.35%. In addition, the BNP Borrower is required to pay, among other fees, a commitment fee of up to 0.50% per annum on any excess unused portion of the BNP Funding Facility and, subject to certain exceptions, a one-time facility reduction fee if the BNP Funding Facility is terminated or there are certain reductions in commitments under the BNP Funding Facility, which facility reduction fee would be equal to the cumulative amount of the commitment fee that would have otherwise been payable from the date of any such termination or reduction through the end of the reinvestment period. Under the BNP Funding Facility, we and the BNP Borrower, as applicable, have made representations and warranties regarding our and their businesses, among other things, and are required to comply with various covenants, servicing procedures, reporting requirements and other customary requirements for similar facilities. The BNP Funding Facility includes usual and customary events of default for facilities of this nature. There were $200.0 million in borrowings drawn on the BNP Funding Facility as of June 30, 2026 and December 31, 2025.
Proceeds from the BNP Funding Facility must be used to acquire collateral loans during the reinvestment period, fund revolving collateral loans, pay certain fees and expenses and make permitted distributions. Other than with respect to the pledge of the equity interests of the BNP Borrower, the BNP Funding Facility is non-recourse to any upstream affiliates of the BNP Borrower, including to us.
Pioneer Credit Agreement
On October 3, 2025, ACI Pioneer Member, LLC, as borrower (the "Pioneer Borrower") and ACI Pioneer Holdings, LLC, as pledgor (the "Pioneer Pledgor"), each our wholly-owned subsidiary, entered into a credit agreement (the "Pioneer Credit Agreement") and together with the Denali Credit Agreement, the Aspen Credit Agreement and the Tango Credit Agreement, the "Investment Credit Facilities") with Natixis, New York Branch as administrative agent and collateral agent ("Natixis") and Société Générale as coordinating lead arranger and bookrunner (together with Natixis in the same roles). The Pioneer Credit Agreement is related to Pioneer Borrower's investment in one of our portfolio investments and includes an amortizing $542.2 million delayed draw term loan facility (the "Pioneer Term Loan"), of which $539.1 million was available and $376.0 million was drawn as as of June 30, 2026, and a $23.5 million debt service reserve letter of credit facility (the "Pioneer DSR LC Facility"), of which nothing was drawn as of June 30, 2026. As of December 31, 2025, $226.0 million was drawn on the Pioneer Term Loan and nothing was drawn on the Pioneer DSR LC Facility.
Borrowings under the Pioneer Term Loan bear interest annually at a rate equal to daily compounded SOFR plus 1.50% per annum, with a step up of 0.125% after three years and outstanding undrawn commitments under the Pioneer Term Loan facility have a commitment fee of 0.50% annually on the average daily unused amount. Since January 2026, the Pioneer Borrower has been making quarterly interest payments, and ending on the maturity date in accordance with an amortization schedule attached to the Pioneer Credit Agreement.
The Pioneer DSR LC Facility provides letters of credit or loans for draws under such LC to support contractual obligations related to the minimum debt service reserve amount under the Pioneer Credit Agreement. An LC commitment fee is due in respect of unused LC commitments in an amount of 0.50% multiplied by the average unused daily LC commitments. LC fees follow the applicable margin of the Pioneer Term Loan, payable quarterly in arrears, at an amount equal to 1.50% annually multiplied by the stated amount of the LC, with a 0.125% step up after three years.
The Pioneer Credit Agreement is secured by a first-priority pledge on (a) all of the equity interests of the Pioneer Borrower, (b) all of the equity interests of Pioneer JV Holdings, LLC, one of our portfolio investments, owned by the Pioneer Borrower and (c) all tangible and intangible assets of the Pioneer Borrower and the equity interests of the Pioneer Borrower owned by the Pioneer Pledgor. Under the Pioneer Credit Agreement, the Pioneer Borrower and the Pioneer Pledgor, as applicable, have made representations and warranties regarding their businesses, among other things, and are required to comply with various covenants, servicing procedures, reporting requirements and other customary requirements for similar facilities. The Pioneer Credit Agreement includes usual and customary events of default for facilities of this nature. Other than with respect to the pledge of the equity interests of the Pioneer Borrower, the Pioneer Credit Agreement is non-recourse to any upstream affiliate of the Pioneer Borrower, including to us.
Rover Credit Agreement
On June 9, 2026 (the "Closing Date"), ACI Rover Parent, LLC (f/k/a BCP Renaissance Parent L.L.C.), as borrower (the "Rover Borrower") ACI Rover, LLC (f/k/a BCP Renaissance, L.L.C.), as subsidiary guarantor ("Rover Borrower Subsidiary"), each a wholly-owned subsidiary of the Fund, entered into a credit agreement (the "Rover Credit Agreement") with Morgan Stanley Senior Funding, Inc. as administrative agent, collateral agent, joint lead arranger and bookrunner ("Morgan Stanley"), MUFG Bank, LTD. and Wells Fargo Securities, LLC as joint lead arrangers and bookrunners, and the other lenders party thereto from time to time. The Rover Credit Agreement includes a $910.0 million senior secured first lien term loan B credit facility (the "Rover Term Loan"). Borrowings under the Rover Term Loan bear interest annually at a rate equal to Term SOFR (as defined in the Rover Credit Agreement) plus 2.25% per annum. As of June 30, 2026, borrowings outstanding under the Rover Term Loan totaled $905.5 million, net of original issue discount. Since June 2026, the Rover Borrower has been making quarterly interest payments.
The Rover Credit Agreement is secured by a first-priority pledge on (a) all of the equity interests of Rover Borrower Subsidiary owned by the Rover Borrower, (b) all of the equity interests of ET Rover Pipeline LLC owned by Rover Borrower Subsidiary and (c) all tangible and intangible assets of the Rover Borrower and Rover Borrower Subsidiary. Under the Rover Credit Agreement, the Rover Borrower and Rover Borrower Subsidiary, as applicable, have made representations and warranties regarding their businesses, among other things, and are required to comply with various covenants, servicing
procedures, reporting requirements and other customary requirements for similar facilities. The Rover Credit Agreement includes usual and customary events of default for facilities of this nature. The Rover Credit Agreement is non-recourse to any upstream affiliate of the Rover Borrower, including the Fund.
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations are based on our unaudited consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The preparation of these unaudited consolidated financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ. The critical accounting estimates should be read in conjunction with the risk factors elsewhere in this Quarterly Report. See "Note 2. Significant Accounting Policies" to our unaudited consolidated financial statements for more information on our critical accounting policies.
Investments
We value our investments in accordance with Section 2(a)(41) of the 1940 Act and Rule 2a-5 thereunder, which sets forth requirements for determining fair value in good faith. Pursuant to Rule 2a-5 of the 1940 Act, the Board has designated the Adviser as its "Valuation Designee" to perform fair value determinations for investments held by us without readily available market quotations, subject to the oversight by our Board. Investments for which market quotations are readily available will typically be valued at such market quotations. In order to validate market quotations, the Valuation Designee, will review a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. Debt and equity investments that are not publicly traded or whose market prices are not readily available will be valued at fair value as determined in good faith by the Adviser, as our Valuation Designee, subject to the Board's oversight, based on, among other things, the input of the Fund's independent third-party valuation firm that has been engaged to support the valuation of such portfolio investments by providing positive assurance monthly and an independent valuation at least semiannually (with certain de minimis exceptions) and under a valuation policy and a consistently applied valuation process. However, we may use these independent valuation firms to review the value of our investments more frequently, including in connection with the occurrence of significant events or changes in value affecting a particular investment.
Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized. Unrealized gains or losses primarily reflect the change in investment values, including the reversal of previously recorded unrealized gains or losses when gains or losses are realized.
Pursuant to Rule 2a-5 under the 1940 Act, the Board designated the Adviser as our Valuation Designee to perform fair value determinations for investments held by us without readily available market quotations, subject to the oversight of the Board. All investments are recorded at fair value.
Investments for which market quotations are readily available are typically valued at such market quotations. In order to validate market quotations, the Valuation Designee looks at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value as determined in good faith by the Valuation Designee, subject to the oversight of our Board, based on, among other things, the input of our independent third-party valuation providers ("IVPs") that have been engaged to support the valuation of such portfolio investments. However, the Valuation Designee may use these independent valuation firms to review the value of our investments more frequently, including in connection with the occurrence of significant events or changes in value affecting a particular investment.
Investments in our portfolio that do not have readily available market quotations (i.e., substantially all of our investments) are valued at fair value as determined in good faith by our Valuation Designee, as described herein. As part of the valuation process for investments that do not have readily available market prices, the Valuation Designee may take into account the following types of factors, if relevant, in determining the fair value of our investments: the enterprise value of a portfolio company (the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time), the nature and realizable value of any collateral, the portfolio company's ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, a comparison of the portfolio company's securities to any similar publicly traded securities, changes in the interest rate environment and the credit markets, which may affect the price at which similar investments would trade in
their principal markets and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent sale occurs, the Valuation Designee considers the pricing indicated by the external event to corroborate its valuation.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market quotations, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of our investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that we may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which we have recorded it. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the valuations currently assigned.
The Valuation Designee, subject to the oversight of the Board, undertakes a multi-step valuation process each quarter, as described below:
•Our quarterly valuation process begins with a preliminary valuation being prepared by the investment professionals responsible for the portfolio investment in conjunction with our portfolio management team and valuation team.
•Preliminary valuations are reviewed and discussed by the valuation committee of the Valuation Designee.
•The Valuation Designee will provide all relevant information related to the portfolio investments for the IVP to independently provide positive assurance on the valuation approach and inputs (monthly), provide positive assurance on the valuation of all positions (quarterly), and estimate a range of fair values (at least semiannually) for each investment:
◦Monthly, the IVP reviews and analyzes the data provided by the Valuation Designee, including the reasonableness of the valuation approach, as well as the mathematical accuracy and the appropriateness and supportability of inputs and assumptions, and provides positive assurance on the valuation approach and inputs;
◦Quarterly, the IVP reviews and analyzes the information provided by the Valuation Designee, along with relevant market and economic data, and provides positive assurance on the valuation of all positions;
◦At least semiannually, the IVP independently determines a range of fair values for each of the portfolio investments; and
◦the IVP provides a report for all investments reviewed to the Valuation Designee containing the IVP's conclusions from the positive assurance procedures or the independent range of value analysis, whichever is applicable for the period.
•The valuation committee of the Valuation Designee determines the fair value of each investment in our portfolio without a readily available market quotation in good faith based on, among other things, the input of the IVPs, where applicable.
When the Valuation Designee determines the fair value of each investment as of the last day of a month that is not also the last day of a calendar quarter, the Valuation Designee intends to update the value of securities with reliable market quotations to the most recent market quotation. For securities without reliable market quotations, the Valuation Designee will generally update the value of such assets using the same set of information that was used in performing the most recent quarterly valuation. Should the Valuation Designee determine that a significant observable change has occurred since the most recent quarter end with respect to the investment (which determination may be as a result of a material event at a portfolio company, material change in public equity valuations, secondary market transaction in the securities of an investment, comparable transactions, or otherwise), the Valuation Designee will determine whether to determine the fair value for each relevant investment using data that has been updated for the impact of the significant observable change.
Fair Value of Financial Instruments
We follow ASC 825-10, Recognition and Measurement of Financial Assets and Financial Liabilities ("ASC 825-10"), which provides funds the option to report selected financial assets and liabilities at fair value. ASC 825-10 also establishes
presentation and disclosure requirements designed to facilitate comparisons between funds that choose different measurement attributes for similar types of assets and liabilities and to more easily understand the effect of our choice to use fair value on its earnings. ASC 825-10 also requires entities to display the fair value of the selected assets and liabilities on the face of the balance sheet. We have not elected the ASC 825-10 option to report selected financial assets and liabilities at fair value.
Investments held by us are valued in accordance with Section 2(a)(41) of the 1940 Act and Rule 2a-5 thereunder and the provisions of ASC 820-10, Fair Value Measurements and Disclosures ("ASC 820-10"), which among other matters, requires enhanced disclosures about investments that are measured and reported at fair value. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure of fair value measurements. ASC 820-10 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires us to assume that the portfolio investment is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. In accordance with ASC 820-10, we have considered its principal market as the market in which we exit our portfolio investments with the greatest volume and level of activity. ASC 820-10 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. In accordance with ASC 820-10, these inputs are summarized in the three broad levels listed below:
•Level 1-Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access.
•Level 2-Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
•Level 3-Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
In addition to using the above inputs in investment valuations, the Valuation Designee continues to employ the net asset valuation policy and procedures that have been reviewed by the Board and are consistent with the provisions of Rule 2a-5 under the 1940 Act and ASC 820-10. Consistent with its valuation policies and procedures, the Valuation Designee will evaluate the source of inputs, including any markets in which our investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value. Where there may not be a readily available market value for some of the investments in our portfolio, the fair value of a portion of our investments may be determined using unobservable inputs.
Our portfolio investments classified as Level 3 are typically valued using an analysis of the enterprise value ("EV") of the portfolio company. EV means the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time. The primary technique for determining EV uses a discounted cash flow analysis whereby future expected cash flows of the portfolio company are discounted to determine a present value using estimated discount rates (typically a weighted average cost of capital based on costs of debt and equity consistent with current market conditions).
See "Note 8. Fair Value of Financial Instruments" to our unaudited consolidated financial statements for more information on our valuation process.
Recent Developments
July Capital Raise
In our monthly closing for July 2026, we issued and sold 45,031,717 Shares (consisting of 25,756,596 Class I Shares, 2,813,041 Class D Shares and 1,394,900 Class S Shares at an offering price of $24.8841 per Share for each class), and received approximately $1,120.6 million as payment for such Shares.
August Capital Raise
In our monthly closing for August 2026, we agreed to sell Shares, including Class I Shares, Class D Shares, Class N Shares and Class S Shares for an aggregate purchase price of $798.8 million. The purchase price per Share will equal the
Fund's NAV per Share of such class as of the last calendar day of July 2026, which is generally expected to be available within 20 business days after August 1, 2026.
No underwriting discounts or commissions have been or will be paid in connection with the sale of such Shares. Although the Fund does not charge investors an Upfront Sales Load with respect to its Shares, if Class D Shares, Class N Shares or Class S Shares are purchased through certain selling agents, shareholders may be charged an Upfront Sales Load or transaction or other fees, including brokerage commissions, in such amount as such selling agents may determine, provided that such charges are subject to a 2.0% cap on NAV for Class D Shares, a 2.0% cap on NAV for Class N Shares and a 3.5% cap on NAV for Class S Shares. No Upfront Sales Loads may be charged on Class I Shares. The issuance of the Shares is exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof, by Rule 506(b) of Regulation D promulgated thereunder and/or Regulation S promulgated thereunder.
Distributions
We have announced the declaration of regular monthly gross distributions for July, August, September, October, November and December 2026, in each case for our Class I Shares, Class D Shares, Class N Shares and Class S Shares in the amounts per Share set forth below:
Gross Distribution Per Common Share
Record Date
Payment Date(1)
Class I Class S Class D Class N
July 31, 2026 August 21, 2026 0.20830 0.20830 0.20830 0.20830
August 31, 2026 September 23, 2026 0.20830 0.20830 0.20830 0.20830
September 30, 2026 October 23, 2026 0.20830 0.20830 0.20830 0.20830
October 30, 2026 November 20, 2026 0.20830 0.20830 0.20830 0.20830
November 30, 2026 December 24, 2026 0.20830 0.20830 0.20830 0.20830
December 31, 2026 January 25, 2027 0.20830 0.20830 0.20830 0.20830
(1) The distributions on our Shares will be paid on or about the payment dates set above.
These distributions will be paid in cash or reinvested in the Shares for shareholders participating in our distribution reinvestment plan. The net distributions to be received by shareholders of the Class D Shares, Class N Shares and Class S Shares will be equal to the gross distribution in the table above, less specific shareholder servicing and/or distribution fees applicable to such class as of their respective record dates. Class I Shares have no shareholder servicing and/or distribution fees.
Ares Core Infrastructure Fund published this content on August 07, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 07, 2026 at 20:28 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]