Ares Capital Corporation is a specialty finance company that operates as a closed-end, non-diversified management investment company. Regulated as a business development company (BDC) under the Investment Company Act of 1940, it is the largest publicly traded BDC in the United States by market capitalization. The company is externally managed by Ares Capital Management LLC, a subsidiary of the global alternative asset manager Ares Management Corporation. Ares Capital's primary investment objective is to generate both current income and capital appreciation through debt and equity investments.
The company's portfolio predominantly consists of first lien senior secured loans, second lien senior secured loans, and mezzanine debt, often with equity components. It focuses on providing direct lending and customized financing solutions to U.S. middle-market companies, typically those with annual earnings between $10 million and $250 million. Ares Capital invests across a highly diversified range of sectors, with significant exposure to software and services, healthcare, commercial and professional services, and financial services. By leveraging the extensive origination capabilities and market presence of its external manager, Ares Capital serves as a critical source of private credit for middle-market businesses while offering public market investors access to private debt strategies.
