Ares Capital Corp (NASDAQ: ARCC) is a business development company (BDC) that provides debt and equity financing to middle-market companies. It makes money primarily through interest income on loans, dividends, and capital gains from a portfolio of first lien senior secured loans, second lien senior secured loans, senior subordinated loans, and equity investments including preferred stock, common stock, and limited partnership interests. The portfolio spans a wide range of industries, with a concentration in software and technology-enabled services businesses, as disclosed in the 10-K filed 2026-02-04. ARCC is externally managed by an affiliate of Ares Management Corporation. The company is structured as a regulated investment company and BDC under the Investment Company Act of 1940, which governs its leverage limits, distribution requirements, and capital-raising activities. Its debt capital structure includes credit facilities, debt securitizations, and unsecured notes, all subject to financial covenants including minimum stockholders' equity and indebtedness restrictions, as described in the FY2025 10-K.

Revenue model

Interest income from floating-rate loans (primarily SOFR-based), PIK interest and PIK dividends from subordinated and equity investments, and realized gains from equity co-investments including common stock, preferred stock, and limited partnership interests.

Products and services

First lien senior secured loans (revolving and term), second lien senior secured loans, senior subordinated loans, preferred stock (including PIK preferred), common stock, warrants, and limited partnership interests. Investments span software, healthcare technology, financial technology, consumer brands, and other middle-market sectors, as evidenced by portfolio schedules in the 10-K filed 2026-02-04.

Customers and end markets

Middle-market companies across sectors including cloud and enterprise software, SaaS, healthcare IT, fintech, payment processing, consumer and apparel brands, outdoor and sporting goods, and public-sector software. Borrowers include companies such as providers of dental practice management software, restaurant ERP systems, identity and access management solutions, and electronic registration software for auto dealers, as listed in portfolio schedules of the FY2025 10-K.

Value-chain role

Direct lender and equity co-investor. ARCC originates, underwrites, and holds credit and equity positions in middle-market companies, functioning as a primary capital provider rather than a loan arranger or distributor.

Geographic exposure

Primarily U.S.-domiciled borrowers, with select non-U.S. investments evidenced by at least one SONIA-referenced loan to a UK-domiciled borrower (Aston Bidco (Holding) Limited, acquired 07/2025), as disclosed in the FY2025 10-K portfolio schedule.

Source: SEC 10-K, filed 2026-02-04

Industry: UNKNOWN Peers: Blue Owl Capital Inc Invesco Ltd Ares Management Corp Blackstone Inc Carlyle Group Inc Franklin Resources Inc Northern Trust Corp SEI Investments Co State Street Corp TPG Inc