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# Ares Capital: Competition Weighs Down On Yields And Margins (Archive)
- URL: https://www.huntingalphas.com/ares-capital-competition-weighs-down-on-yields-and-margins-archive/
- Published: 2024-06-13T23:09:00.000Z
- Updated: 2026-02-27T11:27:13.000Z
- Description: Competitive pressures erode Ares Capital’s high-yield deal access and compress net investment margins.
- Author: Vish (Hunting Alphas)
- Tags: 5-Minute Pitches, #noindex, Archive, #sa-origin, ARCC, Financials

*This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.*

## Elevator Pitch

- Ares Capital has played out as per my expectation since my last update, as it has underperformed the S&P500 by 3.61%. I continue to be bearish on the BDC.
- On the plus side, deal activity is improving. Fundings, commitments and backlog + pipeline figures all show a healthy rebound.
- But Ares Capital's yields and net investment income margins are under stress. Increased competition is making it difficult for the BDC to get its fair share of high-yield investments.
- Valuations are on the premium end, reducing the margin of safety for buys. Technical analysis vs the S&P500 suggests continued underperformance ahead for multiple quarters to years.

Read the full article [here](https://seekingalpha.com/article/4699183-ares-capital-competition-weighs-down-on-yields-and-margins?ref=huntingalphas.com).

#### Disclosures and Disclaimers

**Past performance ≠ future results. Not investment advice. See* [**full Disclaimer*](https://www.huntingalphas.com/disclaimer/)**.*