In October 2004, the Ares Private Debt Group raised a publicly traded specialty finance company, Ares Capital Corporation ("ARCC"), that is regulated as a business development company, or a BDC, under the Investment Company Act of 1940. Ares Capital Corporation is traded on the NASDAQ Global Select Market under the ticker symbol ARCC. ARCC is managed by Ares Capital Management LLC, an affiliate of Ares Management LLC ("Ares"). Ares Capital Corporation's executive offices are located at 280 Park Avenue, 22nd Floor, New York, New York 10017, and its website address is www.arescapitalcorporation.com.

The Ares Private Debt Group is focused on meeting the distinct financing needs of private middle market companies. We seek to invest in companies at all levels of the capital structure and to build a diversified portfolio of assets with an attractive total risk-adjusted return. Returns in our portfolio are generated both through debt investments that pay current and deferred interest, and through capital appreciation from warrant positions and direct preferred and equity co-investments that we make alongside our debt investments. We will make investments in both companies backed by private equity firms and will opportunistically invest in companies without financial sponsorship.

Our team takes a flexible, opportunistic and active approach to investing. The majority of our investments are illiquid and long term in nature and our investment strategy is suited to these investments. We approach each of our investments as a long-term and value oriented investor with a primary focus on minimizing downside risk, protecting invested principal, and generating the appropriate return for the risk we have taken in each company and each security. Our investment strategy relies heavily on structuring expertise and active portfolio management.

Our Private Debt Group professionals are industry and product generalists and make all of our investments through small, integrated deal teams. From origination to commitment and closing to ongoing portfolio management, dealing with one team allows middle market companies an easy and consistent point of contact throughout a transaction. Additionally, a clear and streamlined investment process allows us to move quickly and to close transactions with as few distractions as possible.

Products and Services

The principals in our Private Debt Group provide one-stop financing for middle market acquisitions, recapitalizations and leveraged buyouts. The Private Debt Group invests in a full spectrum of leveraged finance products including:

• First lien senior debt
• Second lien senior debt
• Subordinated debt
• Non-control preferred and common equity

The Private Debt Group has the ability to invest in any of these finance products individually, or in combination.

The majority of managed assets are "self originated", whereby we act either as lead investor, agent or co-agent. However, the Private Debt Group will selectively participate in third-party-led senior and subordinated debt financings. In addition, we continually review portfolio purchases and large block position purchases and opportunistically consider purchasing stressed and discounted debt positions.

Target Investments

The Private Debt Group focuses primarily on transactions involving private middle market companies with EBITDA of $5 to $100 million. Our target investment in any one company generally ranges from $10 to $100 million although the investment sizes may be more or less than the targeted range and are expected to grow with our capital availability. Capital is deployed opportunistically and creatively in structures which generate the most attractive total risk-adjusted returns.

We are long term investors by nature and have experience owning significant, illiquid positions in private companies. As such, we typically seek to invest in North American-based companies with a history of stable cash flows, demonstrated competitive advantages and experienced management teams. In addition, we are strongly oriented to companies with identifiable growth prospects that can generate significant free cash flow. Sectors that we consider to be highly attractive include basic and growth manufacturing, business services, consumer products, health care products and services, and information technology services. We will consider more challenging or cyclical industries such as restaurants, retail, oil and gas, and technology, however, we tend to be less likely to pursue investments in these sectors.