Ares Management Corp. started a roughly $1.5 billion credit fund for high-net-worth individuals that will invest in secured loans to US middle-market companies.

Ares Strategic Income Fund raised more than $847 million in equity commitments from institutional investors and about $625 million of credit facility commitments. The fund will invest primarily in floating interest-rate loans to companies that are first in line for repayment, but may also invest in unsecured loans and other junior debt.

The perpetual, non-traded business-development company will invest alongside Ares’s credit group, which managed $214 billion at year-end.

“It’s a great asset class that’s been very durable over the past 20 years, and it’s been continuing to grow,” Michael Smith, Ares co-head of credit, said Monday in an interview along with Raj Dhanda, who oversees wealth management.

The income fund will be distributed through Ares Wealth Management Solutions, the parent’s retail business, and sold through registered investment advisers and financial advisers in the US.

The debut is part of the firm’s broader push to offer investments to wealthy individuals. Alternative-asset managers are racing to expand their retail channels as institutional investors find it harder to allocate more capital to private markets.

“The individual investor has been interested in uncorrelated yield for some time now,” Dhanda said in the interview. “What makes this particularly timely was in the last year there was a sharp move in interest rates.”

This article was provided by Bloomberg News.