Partner & Co-President, Ares Management Corporation
Ares Management: Positive investment outlook compared with last year
Blair Jacobson, co-head of European credit at Ares Management, speaks to CNBC at the SuperReturn event in Berlin.
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 (13 segments)
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Blair Jacobson0:00
I think that the view this year, frankly, is a lot more positive than last year. Last year there was a lot of anxiety around the macro situation. We had a mini banking crisis, we had the Credit Suisse merger with UBS, we had high inflation, we had rates rising to combat inflation, questions about recession. Fast forward to this year, we've averted recession. The discussion is now around when rates will come down, and certainly central banks have been on hold and we might even see the EU act before the Fed. So from that perspective, there's a lot of optimism in the room. From an end investor perspective, again, a year ago it was the numerator effect, the denominator effect, money coming back. This year, I think they're really happy with their exposure to alternatives and in particular private credit.
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Interviewer0:43
What is especially for private credit? So what are the trends which are currently supporting your business?
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Blair Jacobson0:51
Sure. What we're seeing right now is certainly the banking sector, as they're implementing new regulatory regimes like Basel IV, further retrenching from the industry that they capitalized for so long, really creating a huge advantage for private credit providers. We've seen their market share in Europe, for example, decline from 80% to under 50%, with private credit providers really filling that gap.
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Interviewer1:14
Yeah, you have grown tremendously if you look back over the years. Private credit has really arrived in Europe. So are you also in close contact with, for example, the Mittelstand, the mid-cap industry, which has very often family-owned? Have you access to them?
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Blair Jacobson1:33
Absolutely. Our business model is 90 investment professionals in seven offices all across Europe. We've had an office in Frankfurt since 2009, so for quite a long time. Our average company's revenues are around 200 to 300 million, so we're absolutely focused on the middle-sized companies. And in particular, when you think about Germany, you think about the Mittelstand. That's what banks are lending less to, which provides a great opportunity for lenders like ourselves.
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Interviewer1:58
Let's look at the industry, because of course also the attractiveness of industries goes through cycles. What are you looking at right now?
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Blair Jacobson2:08
So our focus has been on sectors which we think are not directly correlated to the macro. For example, we've said publicly the profits of our 180 companies in Europe are growing high single digits, low double digits, which is well above where GDP is growing. So that's taken us to business services, to healthcare, to non-balance sheet financial services like insurance brokerage, asset management, fund administration, and also to adjacencies like software and telecommunications. Again, really trying to focus on industries which are not highly correlated to leveraged loan and high yield defaults.
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Interviewer2:41
That brings me to infrastructure, because clearly I've been reading loads of papers before coming here, and private infrastructure seems to be quite hot. So what do you see here?
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Blair Jacobson2:57
So we're really excited about the growth opportunity in infrastructure. We think infrastructure is going to require 5 trillion of annual spend for the foreseeable future to 2040, and that's driven by some really big trends, whether that's digital infrastructure, energy transition, transportation, mobility. We think there's a lot to go for. And just think about digital infrastructure, think about the amount of data exploding around the world. First we talked about that from the context of the cloud, now it's AI. That's going to require significant investment in data warehousing, data centers, fiber networks, even cellular networks. And the exciting thing for us is we think the financing for those needs will migrate, as we've seen on the corporate side, from the banks and the public sector to more the private side, which creates a great opportunity for private credit.
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Interviewer3:44
And data warehouses are a huge investment. So what kind of size are we looking at if you talk about warehouses?
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Blair Jacobson3:52
So that can be in the 50s of millions to hundreds of millions. Again, we think the opportunity set there is incredibly large.
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Interviewer4:00
Let's look also at the topic of AI. You briefly touched on it. How is AI actually playing into the whole mix?
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Blair Jacobson4:09
So we're certainly at the early stages of the AI revolution, but whenever you have something that's so transforming, we think you need to take a measured approach both on the opportunities and risks. Opportunities would include things like data warehousing and data centers, which I mentioned before. But from an Ares perspective, we've actually done something really interesting. We made an acquisition of a team of technologists called Bootstrap Labs. They now work for Ares, they brought their expertise to Ares, they're housed within our corporate strategy team, and we're deploying them around the firm from an Ares perspective to help us look at our middle back office to streamline things. But really the holy grail is how we integrate them into our investment process, how we use them to help find companies, monitor companies, do due diligence on investments. And again, that's really what we're moving to, but it's still the early days, but we're really excited about it.