Ares Capital is the largest publicly traded Business Development Company (BDC), providing debt financing primarily to U.S. middle-market companies with annual EBITDA between $10M and $250M. Ares Capital focuses on non-cyclical, service-oriented businesses, typically backed by private equity sponsors, where traditional bank lending has pulled back. Most investments are first lien senior secured loans, though Ares Capital also makes second lien, subordinated, preferred equity, and minority equity co-investments. The portfolio was diversified across 603 borrowers as of year-end 2025. Ares Capital earns income primarily through floating-rate interest on its loan portfolio, supplemented by origination fees, PIK income, dividends from subsidiaries, and gains on equity co-investments. Ares Capital is externally managed by Ares Capital Management, a subsidiary of Ares Management, and has no employees of its own. Two subsidiaries contribute meaningfully to earnings: Ivy Hill Asset Management (IHAM), a CLO and credit vehicle manager with ~$14.6B in AUM; and the Senior Direct Lending Program, a joint venture with Varagon Capital Partners to originate first lien loans. As a regulated investment company, Ares Capital must distribute substantially all taxable income as dividends, making access to debt and equity capital markets essential for growth. Ares Capital uses leverage with a target debt-to-equity ratio of 0.9x–1.25x to amplify returns, and earnings are primarily sensitive to short-term interest rates, portfolio size, origination volumes, and credit losses.