Ares Capital (ARCC) investor relations material

Market positioning and competitive strengths

• Holds a leading position as the largest publicly traded BDC, with over $224 billion invested in U.S. direct lending and a 21+ year track record of performance.

• Benefits from a large, experienced investment team with an average tenure of 18 years and over 230 professionals.

• Maintains a highly diversified portfolio across industries, with no single investment exceeding 1% of total assets and a median portfolio company EBITDA of $92 million.

• Demonstrates significant sourcing advantages through scale, longstanding sponsor relationships, and the ability to commit over $500 million in a single transaction.

• Supported by a global platform with $671 billion in AUM, providing broad market insights and access to differentiated deal flow.

Investment approach and portfolio management

• Employs a disciplined, credit-focused investment approach targeting fundamentally strong, market-leading companies in resilient industries.

• Portfolio is diversified by asset class, with 59% in first lien senior secured loans and meaningful allocations to preferred equity and other equity.

• Active portfolio management includes a 50-person team, robust monitoring, and proactive special situations management.

• Rigorous underwriting process spans several months, emphasizing due diligence, risk assessment, and lead lender positions.

• Flexible capital structure allows investment across the capital stack and access to less competitive market segments.

Financial performance and risk management

• Achieved a 13% gross IRR on realized investments since inception and cumulative net realized gains exceeding $1 billion.

• Maintains annualized first lien loss rates below 10bps and second lien/subordinated loss rates below 20bps, outperforming industry averages.

• Delivered annualized shareholder returns of 12.7% since IPO, outperforming the S&P 500 by ~20% and BDC peers by a wide margin.

• Portfolio volatility remains lower than peers and high yield indices, with strong downside protection through diversification and conservative leverage.

• Asset coverage ratios and fixed charge coverage remain robust, supporting investment grade ratings and stable funding access.