Question · Q3 2025
Finian O'Shea inquired about Ares Capital Corporation's dividend coverage inputs, specifically the allocation framework for junior or alpha-laden opportunities between ARCC and ASIF, and the strategic use of spillover income to support the base dividend.
Answer
CEO Kort Schnabel clarified that deal allocation between ARCC and ASIF is based on available capital and fund mandates, with ARCC's flexible mandate ensuring it receives a share of diverse transactions. CFO Scott Lem added that ARCC's profile is also considered. Regarding spillover income, Mr. Schnabel expressed confidence in covering the dividend, noting the spillover provides additional stability if core earnings temporarily fall below the dividend level, without speculating on specific usage scenarios.