Ares Dynamic Credit Allocation Fund : Proxy Statement for 2023 Annual Stockholders’ Meeting

ARES DYNAMIC CREDIT ALLOCATION FUND, INC.

c/o Ares Capital Management II LLC 2000 Avenue of the Stars, 12th Floor Los Angeles, California 90067

For questions about the Proxy Statement, please call [phone]

March 28, 2023

Dear Stockholder:

Enclosed you will find a Notice and Proxy Statement for the Annual Meeting of Stockholders of Ares Dynamic Credit Allocation Fund, Inc., a Maryland corporation (the "Fund"), to be held in virtual format via live webcast on May 16, 2023.

The matter on which you, as a stockholder of the Fund, are being asked to vote is the election of two of the Fund's directors.

After reviewing the matter carefully, the Board of Directors recommends that you vote FORthe election of each of the nominees.

YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE TAKE A FEW MINUTES TO REVIEW THIS MATERIAL AND AUTHORIZE A PROXY TO VOTE YOUR SHARES BY TELEPHONE, BY INTERNET OR BY USING THE ENCLOSED PROXY CARD. IT IS IMPORTANT THAT YOUR PROXY BE AUTHORIZED BY THE CLOSE OF BUSINESS EASTERN TIME ON MAY 15, 2023 IF YOU AUTHORIZE A PROXY BY MAIL, OR BY 11:59 P.M. EASTERN TIME ON MAY 15, 2023 IF YOU AUTHORIZE A PROXY BY TELEPHONE OR INTERNET. YOUR PROMPT RESPONSE IS NEEDED TO AVOID FOLLOW-UP MAILINGS, WHICH WOULD INCREASE THE COSTS PAID BY ALL STOCKHOLDERS.

Thank you very much for your assistance.

Respectfully,

Ian Fitzgerald

Secretary

ARES DYNAMIC CREDIT ALLOCATION FUND, INC.

Notice of the Annual Meeting of Stockholders

May 16, 2023

To the Stockholders of Ares Dynamic Credit Allocation Fund, Inc.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting") of Ares Dynamic Credit Allocation Fund, Inc., a Maryland corporation (the "Fund"), will be conducted in virtual format via live webcast on May 16, 2023 at 2:15 p.m. Pacific Time, for the following purposes:

1. To consider and vote upon the election of two Class I directors, to serve for a term expiring on the date on which the Annual Meeting of Stockholders is held in 2026 and until their successors are duly elected and qualify ("Proposal 1").
2. To transact such other business as may properly come before the Meeting or any postponements or adjournments thereof.

The Board of Directors of the Fund has fixed the close of business on March 20, 2023 as the record date for the determination of stockholders entitled to notice of and to vote at the Meeting or any postponements or adjournments thereof.

The Board of Directors of the Fund unanimously recommends that the stockholders vote FORthe election of the nominees as Directors with respect to the Fund.

You are cordially invited to attend the Meeting virtually via live webcast. Instructions on how to register to attend, vote and ask questions at the Meeting can be found at www.virtualshareholdermeeting.com/ARDC2023. Stockholders who do not expect to attend the Meeting virtually are requested to authorize a proxy by telephone, by Internet or by completing, dating and signing the enclosed proxy card and returning it promptly in the postage- paid reply envelope provided for that purpose. The enclosed proxy is being solicited by the Board of Directors of the Fund.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 16, 2023: This Notice, the Proxy Statement, a proxy card for the Fund and the annual report for the Fund are available on the Internet at www.arespublicfunds.com.Requests for an annual report should be made in writing to D.F. King & Co., Inc., 48 Wall Street, 22nd Floor, New York, New York 10005, or by accessing the Fund's website at www.arespublicfunds.com, or by calling

1. 605-1958or by sending an e-mail to [e-mail]. You are encouraged to review all of the information contained in the proxy materials before voting. It is important that your proxy be authorized by the close of business Eastern Time on May 15, 2023 if you authorize a proxy by mail, or by 11:59 p.m. Eastern Time on May 15, 2023 if you authorize a proxy by telephone or Internet. The Fund has two classes of capital stock outstanding, common stock and preferred stock. The holders of the preferred stock, voting as a class, have the sole right to elect the two directors designated as the preferred stock directors: Elaine Orr and David Sachs. Because Elaine Orr is the sole preferred stock director whose term is expiring at this year's Meeting, Elaine Orr will be voted on solely by the holders of the Fund's preferred stock. The holders of the Fund's common stock and preferred stock, voting together as a single class, are entitled to elect the remaining Directors. Among the remaining Directors, only Bruce H. Spector's term is expiring at this year's Meeting.

By order of the Board of Directors of the Fund

Ian Fitzgerald

Secretary

March 28, 2023

PROXY STATEMENT

ARES DYNAMIC CREDIT ALLOCATION FUND, INC.

ANNUAL MEETING OF STOCKHOLDERS

MAY 16, 2023

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors (the "Board", the members of which are referred to as "Directors") of Ares Dynamic Credit Allocation Fund, Inc. ("ARDC" or the "Fund"), a Maryland corporation, for use at the Annual Meeting of Stockholders (the "Meeting"), to be held in virtual format via live webcast on May 16, 2023 at 2:15 p.m. Pacific Time, and at any postponements or adjournments thereof.

Proxy solicitations will be made, beginning on or about March 29, 2023, by mail, in person or by telephone or facsimile or other electronic means, by officers of the Fund or personnel of Ares Capital Management II, LLC (the "Investment Manager"). Any stockholder authorizing a proxy has the power to revoke it by executing a superseding proxy by telephone, Internet or mail following the process described on the proxy card or by submitting a notice of revocation to the Fund prior to the date of the Meeting, or at the virtual Meeting. All properly executed proxies received in time for the Meeting will be voted as specified in the proxy or, if no specification is made, "FOR" the election of the nominees as Directors, as described in this Proxy Statement, and at the discretion of the proxy holders as to the transaction of any other business that may properly come before the Meeting.

The Fund has two classes of capital stock outstanding consisting of common stock (the "Common Stock") and preferred stock (the "Preferred Stock" and, together with the Common Stock, the "Shares"). The Fund has three series of Preferred Stock outstanding which are classified as Series A Mandatory Redeemable Preferred Stock, Series B Mandatory Redeemable Preferred Stock and Series C Mandatory Redeemable Preferred Stock. Each Share is entitled to one vote at the Meeting with respect to matters to be voted on by the class to which such Share belongs, with pro rata voting rights for any fractional Shares. No Shares have cumulative voting rights. The holders of the Preferred Stock, voting as a class, however, have the sole right to elect the two directors designated as the Preferred Stock directors: Elaine Orr and David Sachs. Because Elaine Orr is the sole Preferred Stock director whose term is expiring at this year's Meeting, Elaine Orr will be voted on solely by the holders of the Fund's Preferred Stock, with each series voting together as a single class. The holders of the Fund's Common Stock and Preferred Stock, voting together as a single class, are entitled to elect the remaining Directors. Among the remaining Directors, only Bruce H. Spector's term is expiring at this year's Meeting. For voting by the Preferred Stockholders on a matter requiring a separate vote of the Preferred Stock, which is the case at this year's Meeting regarding the nomination of Elaine Orr, the presence at the virtual Meeting or by proxy of the holders of Preferred Stock entitled to cast a majority of the votes entitled to be cast by the Preferred Stock on the matter shall constitute a quorum. For voting by the Common Stockholders and the Preferred Stockholders on a matter requiring the total vote of the Common Stockholders and the Preferred Stockholders, which is the case at this year's Meeting regarding the nomination of Bruce H. Spector, the presence at the virtual Meeting or by proxy of the holders of Common Stockholders and the Preferred Stockholders entitle to cast a majority of the votes entitled to be cast by the Common Stockholders and the Preferred Stockholders on the matter shall constitute a quorum.

For purposes of determining the presence of a quorum for transacting business at the Meeting, executed proxies returned without marking a vote on Proposal 1 will be treated as Shares that are present for quorum purposes and will be voted "FOR" the election of the nominees as Directors. Abstentions are included in the determination of the number of Shares present at the Meeting for purposes of determining the presence of a quorum. If a stockholder of the Fund is present at the virtual Meeting or by proxy at the Meeting but does not cast a vote, the stockholder's Shares will count towards a quorum. In the event a quorum is not present at the Meeting, or in the event that a quorum is present at the Meeting but sufficient votes to approve any of the proposed items are not received, the Meeting may be adjourned by the chairman of the Meeting (as determined pursuant to the Fund's Bylaws). If a quorum is present, a stockholder vote may be taken on one or more of the proposals in this Proxy Statement prior to such adjournment if sufficient votes have been received for approval and it is otherwise appropriate. The chairman of the Meeting may adjourn any meeting of stockholders from time to time to a date not more than 120 days after the original record date without notice other than announcement at the Meeting. At such adjourned meeting at which a quorum shall be present, any business may be transacted which

1

might have been transacted at the Meeting as originally notified. The Fund may postpone or cancel a meeting of stockholders by making a public announcement (as defined in the Fund's Bylaws) of such postponement or cancellation prior to the meeting. Notice of the date, time, and place to which the meeting is postponed shall be given not less than ten days prior to such date and otherwise in the manner set forth in the Fund's Bylaws.

The Board has fixed the close of business on March 20, 2023 as the record date for the determination of stockholders entitled to notice of and to vote at the Meeting and at any postponement or adjournment thereof. As of the record date, the Fund had outstanding 22,914,939 shares of Common Stock, 800,000 shares of Series A Mandatory Redeemable Preferred Stock, 1,200,000 shares of Series B Mandatory Redeemable Preferred Stock and 2,000,000 shares of Series C Mandatory Redeemable Preferred Stock.

Management of the Fund knows of no business, other than that mentioned in Proposal 1 of the Notice of Meeting, which will be presented for consideration at the Meeting. If any other matter is properly presented, it is the intention of the persons named in the enclosed proxy card to vote in accordance with their discretion.

The Fund will furnish, without charge, a copy of its annual report for the fiscal year ended December 31, 2022. Requests for a report should be made in writing to D.F. King & Co., Inc., 48 Wall Street, 22nd Floor, New York, New York 10005, or by accessing the Fund's website at www.arespublicfunds.com, or by calling [phone] or by sending an e-mail to [e-mail].

IMPORTANT INFORMATION

This Proxy Statement discusses important matters affecting the Fund. Please take the time to read the Proxy Statement, and then authorize a proxy to vote your Shares. You may obtain additional copies of the Notice of Meeting, Proxy Statement and proxy card by calling [phone] or by accessing www.arespublicfunds.com. There are multiple ways to authorize a proxy to vote your Shares. Choose the method that is most convenient for you. To authorize a proxy by telephone or Internet, follow the instructions provided on the proxy card. To authorize a proxy by mail simply fill out the proxy card and return it in the enclosed postage-paid reply envelope. Please do not return your proxy card if you authorize a proxy by telephone or Internet. To vote at the virtual Meeting, follow the instructions on how to register to attend and vote at the Meeting, which can be found at www.virtualshareholdermeeting.com/ARDC2023.

PROPOSAL 1

ELECTION OF DIRECTORS

The Fund's Articles of Amendment and Restatement provide that the Board shall be divided into three classes: Class I, Class II and Class III. The terms of office of the current Directors of the Fund in each class continue until the Annual Meeting of Stockholders in the year indicated and until their respective successors are duly elected and qualify: Class I, 2023; Class II, 2024; and Class III, 2025. At each subsequent annual election, Directors chosen to succeed those whose terms are expiring will be identified as being in the same class and will be elected for a three-year term. The effect of these staggered terms is to limit the ability of other entities or persons to acquire control of the Fund by delaying the replacement of a majority of the Board members.

The terms of Elaine Orr and Bruce H. Spector will expire at the 2023 Annual Meeting of Stockholders of the Fund. Elaine Orr is a new Director, appointed by the Fund's Board of Directors on August 9, 2022. At a meeting held on February 28, 2023, the Board nominated Elaine Orr and Bruce H. Spector for election to serve as Class I Directors of the Fund until the Fund's 2026 Annual Meeting of Stockholders and until their successors are duly elected and qualify.

The persons named in the accompanying proxy card intend, in the absence of contrary instructions, to vote all proxies "FOR" the election of Elaine Orr and Bruce H. Spector, each to serve for a term for the Fund expiring on the date on which the Annual Meeting of Stockholders of the Fund is held in 2026, and until their respective successor is duly elected and qualify. Each nominee has indicated that they will serve if elected. If a nominee should be unable to serve, an event not currently anticipated, the proxies will be voted for such person, if any, as is designated by the Board to replace the nominee. Under the Fund's charter and the Investment Company Act of 1940, as amended (the "1940 Act"), holders of the Fund's Preferred Stock, voting as a separate class, are entitled, to the exclusion of holders of Common Stock, to elect two Directors, and holders of the Fund's Common Stock and Preferred Stock, voting together as a single class, are entitled to elect the remaining Directors. The holders of the Fund's outstanding Preferred Stock would be entitled to elect the minimum number of additional Directors that would represent a majority of the Directors in the event that dividends on the Fund's

2

Preferred Stock are in arrears for two full years. No dividend arrearages exist as of the date of this Proxy Statement. Elaine Orr and David Sachs are currently the Directors elected solely by the holders of the Fund's Preferred Stock. A quorum of the Preferred Stockholders must be present at the virtual meeting or by proxy at the Meeting in order for the proposal to elect Elaine Orr to be considered. A quorum of the Common Stockholders and the Preferred Stockholders, in total, must be present at the virtual meeting or by proxy at the Meeting in order for the proposal to elect Bruce H. Spector to be considered. If you submit a proxy and do not indicate whether your vote should be cast for or against the proposal, your Shares will be voted "FOR" the election of the nominees as Directors. The Fund's Directors are not required to attend the Meeting. Three of the Directors of the Fund then in office attended the Fund's Annual Meeting of Stockholders held on May 12, 2022.

Information Concerning the Nominees and Members of the Board of Directors

The following table provides information concerning the nominees and other members of the Board. The Board consists of five Directors, three of whom are not "interested persons" of the Fund, as that term is defined in Section 2(a)(19) of the 1940 Act (each, an "Independent Director"). The terms of the Class II and Class III Directors do not expire this year.

				Length of		Principal Occupation(s) or		Other Public Company
Name, Address(1)		Position(s) Held		Time Served		Employment During		Board Memberships
and Year of Birth		with Fund		and Term of Office		Past Five Years		During Past Five Years
Interested Directors(2)
David A. Sachs†		Director and	Since 2011**	Partner, Ares Management	Terex Corporation;
1956 . . . . . . . . . . . Chairman of the			Corporation ("Ares")	CION Ares Diversified
		Board					Credit Fund; Ares
							Private Markets Fund
Seth J. Brufsky		Director,	Since 2012*	Partner, Portfolio Manager and	None
1966 . . . . . . . . . . . President, Chief			Chairman of Global Liquid
		Executive Officer			Credit in the Ares Credit
		and portfolio			Group; member of the Ares
		manager of the			Credit Group's U.S. Liquid
		Fund			Credit Investment Committee
					and the Fund's Investment
					Committee
Independent Directors/Nominees
Elaine Orr†		Director	Since 2022***	Independent Consultant; from	Engine No. 1; Transform
1966					2018 to 2019, Senior Director	500 ETF; Engine No. 1;
					of Philanthropy and Strategic	Transform Climate ETF;
					Partnerships for the Robert	Engine No. 1; Transform
					Toigo Foundation	Supply Chain ETF;
							CION Ares Diversified
							Credit Fund
John J. Shaw		Director	Since 2012*	Independent Consultant; prior	CION Ares Diversified
1951					to 2012, President, Los	Credit Fund
					Angeles Rams
Bruce H. Spector		Director	Since 2014***	Independent Consultant; from	CION Ares Diversified
1942					2007 to 2015, Senior Advisor,	Credit Fund
					Apollo Global Management,
					LLC (private equity)

1. The address of each Director is care of the Secretary of the Fund at 2000 Avenue of the Stars, 12th Floor, Los Angeles, California 90067.
2. "Interested person," as defined in the 1940 Act, of the Fund. David A. Sachs and Seth J. Brufsky are interested persons of the Fund due to their affiliation with the Investment Manager.

• Term continues until the Fund's 2024 Annual Meeting of Stockholders and until their successor is duly elected and qualifies.

3