Ares Capital has reported another successful year, driven by “strong credit results”.
The asset manager saw a record year of core earnings, with its share price rising to $2.37 (£1.88) over the course of the year. The company’s book value per share also hit a new high of $19.24.
Kipp deVeer, chief executive of Ares Capital, said that the firm’s commitment to sourcing, underwriting and portfolio management has led to the success of its credit performance.
“Our record fourth quarter core EPS and net asset value per share concluded another successful year for our company,” said deVeer.
“We continue to drive strong credit and financial results using our extensive sourcing, underwriting and portfolio management capabilities.
“We believe we are heading into 2024 from a position of strength and will seek to build upon our 14-year track record of paying a stable regular quarterly dividend for our shareholders.”
During the fourth quarter of 2023, Ares Capital made new investment commitments of approximately $2.4bn, of which approximately $1.6bn were funded.
87 per cent of these new investment commitments were in first lien senior secured loans, with the remainder spread between subordinated certificates of the senior direct lending program, senior subordinated loans, preferred equity and ‘other’ equity.
The weighted average yield of debt and other income producing securities funded during the period at amortized cost was 12.3 per cent, according to Ares. The weighted average yield on total investments funded during the period at amortized cost was 11.8 per cent.
The company said that its strong finances mean that it is well positioned to make more opportunistic investments in the year ahead.
“During the fourth quarter and so far this year, we further strengthened our liquidity by raising $1.3bn of unsecured notes on market leading terms,” added Penni Roll, chief financial officer of Ares Capital.
“With over $6bn of available capital after considering the January notes issuance, we remain well positioned to invest opportunistically in a more active market environment.”
Between 1 January 2024 and 1 February 2024, Ares Capital made new investment commitments of approximately $705m, including 89 per cent in first lien senior secured loans.
The weighted average yield of debt and other income producing securities funded during the period at amortized cost was 11.3 per cent and the weighted average yield on total investments funded during the period at amortized cost was 10.7 per cent.