Ares Capital reports satisfactory Q2 performance, despite decrease in earnings
Ares Capital, a leading business development company specializing in mid-market financing solutions, reported another strong quarter in Q2 2025. The company demonstrated solid financial performance marked by significant investments, steady dividends, and robust liquidity.
Fundraising and Investments
Ares Capital made $2.6 billion in new gross commitments in Q2 2025, a decrease from the same quarter last year. However, investment exits increased to approximately $1.9 billion, demonstrating active portfolio management. The company also raised over $2 billion in new debt capital, resulting in about $6.5 billion of available liquidity to support portfolio growth and direct lending opportunities.
Of the new commitments, 82% were in first lien senior secured loans, while the remaining were in subordinated certificates of the senior direct lending program (SDLP), senior subordinated loans, preferred equity, Ares Capital's subordinated loan to Ivy Hill Asset Management (IHAM), and other equity. Approximately $2 billion of the $2.6 billion in new investment commitments were funded.
Earnings and Dividends
Core earnings per share for Ares Capital in Q2 2025 were $0.50, down from $0.61 year-over-year. Net investment income decreased from $386 million to $342 million compared to Q2 2024. Despite this, CEO Kort Schnabel described the quarter as solid with strong core earnings and net asset value growth reflecting the portfolio's performance.
The board of directors declared a third quarter 2025 dividend of $0.48 per share, consistent with the previous quarter.
Outlook
Schnabel expressed optimism about increased market transaction activity going forward, leveraging their deep relationships and extensive market coverage. The company is well-positioned to benefit from this pickup in activity.
Moreover, Ares Capital boosted its infrastructure debt platform with new hires, further strengthening its capabilities in this area.
Overall, Ares Capital's current financial strategy focuses on maintaining strong liquidity, actively managing investments, sustaining dividends, and raising capital to support growth. The parent company, Ares Management Corporation, is also experiencing robust fundraising and AUM growth, signaling a positive outlook for the group’s broad investment platform.
[1] Ares Management Corporation Q2 2025 Results: Strong Fundraising and AUM Growth (Source: [Link to related article]) [2] Ares Capital Q2 2025 Earnings Release: Solid Financial Performance (Source: [Link to Ares Capital's official earnings release]) [3] Ares Capital Announces Third Quarter 2025 Dividend of $0.48 per Share (Source: [Link to Ares Capital's official dividend announcement])
Ares Capital continued its focus on finance and investing in Q2 2025, making $2.6 billion in new gross commitments and raising over $2 billion in new debt capital. The investments were predominantly in first lien senior secured loans, subordinated certificates of the senior direct lending program, senior subordinated loans, preferred equity, Ares Capital's subordinated loan to Ivy Hill Asset Management, and other equity, with approximately $2 billion of the commitments funded. Additionally, the company sustained its dividends, with a third quarter 2025 dividend of $0.48 per share declared. This financial strategy aims to maintain strong liquidity, actively manage investments, and support growth.
