Partner & Co-President, Ares Management Corporation
Co-President Blair Jacobson on Private Credit Market Dynamics, Rates and Infrastructure Opportunity
Co-President Blair Jacobson joined The Pulse with Bloomberg’s Francine Lacqua to discuss the disconnect between today’s private credit headlines and the strength and performance of Ares’ portfolio, the continued investment opportunity in private infrastructure, why most companies still prefer to remain private and more.
Source: Bloomberg
Host: Francine Lacqua
Date: June 4, 2026
About Blair Jacobson
Blair Jacobson, co-president of Ares Management, discussed private markets in two media appearances in June 2026. At SuperReturn International, he described a "disconnect between market anxiety and the fundamental performance" he is seeing, stating that portfolio companies are growing 8 to 12% per year and that non-accrual rates are lower than historical averages. He called AI-driven infrastructure investment a "supercycle megatrend of our lifetimes," citing a projected $2 trillion opportunity over five years to build data centers and $1.5 trillion to power them. Jacobson also noted that Ares is increasing its market share as fundraising concentrates among larger managers. In a Bloomberg interview, Jacobson said that most companies prefer to remain private due to the availability of capital from private equity, credit, and infrastructure sources. He pointed to a trend of declining public company listings and stated that institutions continue to back private funds because they need asset returns to meet growing liabilities. Jacobson reported that Ares had record fundraising for two consecutive years and expected another record in 2026.
Transcript (27 segments)
F
Francine0:00
Now, let's discuss the markets, and of course, the future with Blair Jacobson. He's co-president of Ares Management. Blair, thank you so much for joining us. Look, I know there's a lot of private equities and private markets and private credit. So, what do you think is the pain threshold that we're seeing now and that we'll see in the next couple of quarters?
B
Blair Jacobson0:17
Well, thanks, Francine. It's great to be here with you. We're seeing a real disconnect between many of the headlines being reported and what we're actually seeing in our portfolios. If you think about it, we get signals from 3,000 companies around the world, and what are they telling us? They're growing 8 to 12% per year. We're credit investors, so we look very closely at their statistics; they're trending in the right direction. And there's a lot of discussion and anxiety about distress, but we're not seeing it. In fact, when we look at non-accrual rates, which is a prelude for potential defaults and losses, it's lower than what we've seen historically.
F
Francine0:56
But Blair, so why is that? Again, if you have a mismatch, is it the quality of certain firms or the quality of investment in certain private markets compared to what you're invested in? Because there's something going on. You can't tell me that it's all rosy.
B
Blair Jacobson1:12
What I would say is, if you think about the broader backdrop, the macro situation, yes, there's volatility. We're thinking a lot about inflation, oil prices, and rates. But overall, GDP is growing; it will grow 2% in the US. Europe and the UK will grow half a percent to 1% this year. We're not seeing major distress in the liquid markets for loans and bonds. Even if you look at the big bank earnings, they've telegraphed that charge-off rates for consumer loans, credit cards, and C&I loans are actually going down. So, I think the broader macro picture is a tailwind for many of these businesses, and it's probably better than what the headlines would suggest.
F
Francine1:51
So, there's a large amount of dry powder in the industry, and it's dry powder that's been built up over time. I mean, at some point, does it have to start being handed back to LPs or having some of the tough conversations about what happens next?
B
Blair Jacobson2:06
So, for institutional funds, usually dry powder is available for 4 or 5 years, which tends to be the right amount of time to put it to work, and most managers can then invest through the cycle. What we're seeing today is that our deployment has been strong.
F
Francine2:22
Okay.
B
Blair Jacobson2:22
Again, we have a positive macroeconomic backdrop. And in fact, some of the trends that you speak a lot about on your show around what's going on in the wealth channel, the retail channel, means that less capital is coming into the industry, which means less competition. And when there's less competition, we can actually charge higher interest rates, have slightly more conservative loans and documentation. So, we've seen globally that deployment has been pretty positive. And there are also some countercyclical elements to deployment. When there's nervousness in the markets, that can be good for our special situations business, which had a big fundraise this year, and our secondaries business.
F
Francine2:59
Where do you expect the most deals to come from, sector-wise, but also in terms of countries?
B
Blair Jacobson3:06
Sure. What we've seen is that the US is always the fundamental backdrop to most global markets. It's motoring ahead. It's the biggest market. Europe's a bit patchy geography by geography. Again, growth is a bit slower, it's more highly regulated. We're seeing Asia pick up also in a meaningful way.
F
Francine3:24
Are data centers overdone?
B
Blair Jacobson3:26
So, let's spend a minute on the digital trend. It's something I personally spend a lot of time with as well. Firstly, we're big believers in this trend. We're all using more data each and every day in our personal lives, in our corporate lives. The hyperscalers keep increasing their CapEx projections. 600 billion this year, now it's 700 billion. All of that will require more data. When you look at data centers today, the demand is actually exceeding supply. And that's a great dynamic. So, industry forecasts that two trillion of investment will be needed in the next five years for data centers, but that's the broad trend. And we don't invest in the broad trend. What we're looking for are specific assets. And we have a view that if you invest in data centers from a development perspective in major metropolitan areas that are more focused on cloud than AI learning models, and also have very significant 15-20 year contracts and leases with investment grade hyperscaler clients, that's a great place to be.
F
Francine4:27
And this is what across the world or again, it seems that everything that happens in the US and gets rolled out.
B
Blair Jacobson4:32
So, it's interesting if we look at our platform, we actually started investing in Japan first. In Tokyo and Osaka, great markets. We're now active in East London in the Docklands. We have assets just south of Washington, D.C. in Northern Virginia and São Paulo, in Brazil. Again, we like to focus on primary markets where the supply demand is favorable rather than secondary or tertiary markets.
F
Francine4:58
We spend a lot of time there on this show and actually on Bloomberg TV at large talking about these mega IPOs. I'm a little bit obsessed with SpaceX to try and understand exactly what happens next. Then we have Anthropic. I mean, does that change the nature of the public markets? Does it also kind of matter to your world?
B
Blair Jacobson5:15
Yeah, it's a great question. I think we're seeing this opening of the floodgates of these very large mega IPOs that will take place in the coming weeks and months. But when you look at the overall trend and take a step back at most businesses, there's a definite trend for businesses to be private. The number of companies on the major stock exchanges in the world keeps declining. The number of companies that are private to begin with also are tending to want to stay private for longer. There's so much capital available to fund their business plans through private equity, private credit, infrastructure, etc. that I think they want to invest for the long term, which is difficult when you're a public company.
F
Francine5:57
So do you see, with these mega IPOs, does it move some of the smaller IPOs to secondary markets and so would they think actually of going private or
B
Blair Jacobson6:05
It certainly could. So for example, some of the smaller public companies that are listed, maybe they don't trade much, maybe they don't have much float, maybe it's hard for them to get additional equity capital to fulfill their growth ambitions. That's why focusing more on private markets for them could be a great option.
F
Francine6:23
So we talk a lot about these inflationary pressures, and at the moment especially in the US they seem to be cancelled out thanks to the boom on AI. Do you worry about rates going up?
B
Blair Jacobson6:34
So you have to think about where we are. So rates are down around 200 basis points from their highs and even when we talk about higher for longer, we're still at what we believe is a mathematically comfortable position for our companies. By the way, we just saw how our companies behave when rates were a lot higher, they made it through. The other thing I would say for most of private credit is we invest in floating rate assets, which means if rates are a little bit higher, our investors make a higher return.
F
Francine7:07
We're starting to see some of the second quarter request exit semi-liquid private credit funds coming in. I guess managers are also imposing some of the new rules or lower withdrawal limits. How worried are you about sustained retail investor retreat for private credit firms?
B
Blair Jacobson7:23
So it's another topic that's very much in the news. Our firm's view is that wealth is not broken. In fact, our wealth business will grow this year. We've said this publicly. We have eight products, two of which are focused on private credit in US. Those are the ones that are under the microscope but our non-traded REITs are growing, infrastructure growing rapidly, European private credit hasn't really come over those concerns. That's growing, sports entertainment, etc. And I've probably had dozens of meetings with these types of investors. They understand that in order to gain access to institutional quality loans and investments that are illiquid, they need to be in a structure that reflects that. So, I think their viewpoint is they are performing well. Again, these underlying funds are meeting what we guided investors to expect. That's high single-digit, double-digit returns, similar levels of yield. And as long as that continues, we think that there's going to be a very bright future for wealth products.
F
Francine8:25
If rating agencies start to now review some of the creditworthiness of BDCs, I mean, is that something that institutional investors will it make them more risk-averse?
B
Blair Jacobson8:37
So, when we think about institutional investors, and again, I spend so much of my time speaking to them around the globe from sitting here in London, I would say they're a lot less concerned about how private credit is moving. They're more looking at what's the next opportunity to focus on. And rating agencies will take their view based on the data that they have. That might impact borrowing costs here and there a little bit. But again, I would encourage you and your viewers to really focus on the fundamentals of how the companies are doing. That's certainly what the institutions are doing. They're continuing to back these types of funds. We're seeing it in our own fundraising results, too.
F
Francine9:16
I mean, is there something that will change in terms of that relationship in the next couple of years?
B
Blair Jacobson9:22
I think when we look at what institutions need, whether they are corporate pension plans, public pension plans, sovereign wealth funds, insurance companies, they have growing liabilities that need asset returns. And if we can continue to generate these types of returns in the future, again, we think that the fundraising will continue. And it's been very, very stable despite a lot of disruption in the world over the past few years. Our funds had record fundraising for 2 years in a row. We had a great first quarter. We said we think this year will be another record for us. And a lot of that is based on institutional support.
F
Francine9:59
Thank you so much for joining us. That was Blair Jacobson, the co-president of Ares Management with a thoughtful and good interview on where the market goes next in private.