Live from the Milken Institute Global Conference, Ares CEO Michael Arougheti joined a broadcast interview with CNBC’s David Faber to discuss today’s private credit environment, volatility in today’s market—and what it means for firms like Ares—and the underlying strength of the business that supports his confidence in Ares’ ability to grow and perform through this period.
What Michael Arougheti said
Written from the verified transcript and checked against it. Every figure links to the moment it was said.
Michael Arougheti, CEO of Ares Management, discussed the company's Q1 2026 earnings and market volatility. He explained that performance income is predictable due to European waterfall structures, with annual guidance more accurate than quarterly. AUM exceeded $600 billion, up 29%, with record fundraising of $30 billion in Q1, $20 billion from private credit. He dismissed private credit concerns as 'noise,' noting institutional investors are allocating more during volatility. Redemptions in wealth channel are stabilizing, with $4 billion gross raised in Q1, and wealth represents less than 10% of private credit flows. He cited a non-traded BDC with one non-approval out of 700+ companies and 10%+ returns. An independent review found 86% of software portfolio low risk for AI disruption. Ares is adding AI layers, not replacing core systems. He reaffirmed five-year guidance of 20-25% annual growth.
Key takeaways
Ares AUM exceeded $600 billion, up 29% year-over-year.
Q1 2026 fundraising was a record $30 billion, with $20 billion in private credit.
Wealth channel represents less than 10% of private credit flows, and redemptions are stabilizing.
Independent review found 86% of software portfolio low risk for AI disruption.
Ares reaffirmed five-year guidance of 20-25% annual growth.
2:54That said, do you expect that we're going to get another news cycle where redemptions exceed the 5% for so many of these funds and so we end up discussing it on air and it brings up yet again a concern overall for the industry?
3:56What is that saying about this wealth channel and the structure of what's going on?
5:19You came out saying what, 86% is low risk for AI disruptions. What does that actually mean?
6:35So you're confident in what they came back with?
6:37How are you seeing it and how are you using it at Ares given the larger perspective of what it's going to mean for software companies that are providing services to the likes of Ares?
8:21How do you view it, given you obviously, you know, over time Ares has performed quite well, but not for the last couple of years as a stock?
Welcome back. We of course are live at the Milken Global Conference right here in Beverly Hills. Fresh off its latest earnings report, Ares Management points to resilient fundraising and continued demand across alternative assets. Joining us now, a CNBC exclusive, is the company's co-founder and CEO Michael Arougheti. I think this is an annual tradition.
And good to have you. Since you just reported earnings, I'm looking, the stock is actually having a nice little move here as well. Let me get to kind of one of the key questions I at least picked up, which was performance income. You said in March, in Q1, you realized net performance income of around 75 million. That was below 100 million guidance, but you're sticking with your full-year guidance. So, the year seems to be a little bit back-end loaded and you would need to generate as much as 275 million in the remaining three quarters. What gives you the confidence you're going to be able to do that?
Yeah, I'll unpack that and then I want to go back and talk about some of the other things in the earnings report. I think it's pretty instructive of what we're seeing generally in the alt space. The way that our performance income is differentiated from a lot of the traditional PE and equity-centric managers is those are largely European waterfall, meaning we get paid at the end of fund life above a hurdle rate, and that hurdle rate typically is below the interest income that we're generating on those funds. So we don't have to sell a company to generate carried interest. So there's a high degree of predictability and visibility into that. So we've actually put out five-year guidance on what we believe the trajectory of that income will be. It will be lumpy quarter to quarter, but the annual guide is going to usually be pretty accurate.
Okay. So that's why you're confident on it. As you said, and the market is reacting to, you put out some fairly impressive numbers. AUM is above 600 billion. That was up 29% I believe. New fundraising and investing exceeded 100 billion. You raised 30 billion of gross capital in the first quarter. Meanwhile, your stock price overall has not been performing well. You've been caught up in all of the concerns around private credit. So, how do you think about it?
It's really dissonant because I think it's, for me, it's really a focus on fundamentals versus the noise that's happening in the market. So, as you said, record revenue, record fundraising, diversity of fundraising across all of our strategies, including private credit. So, if you look at our $30 billion of our first quarter record, $20 billion of that was in private credit. The bulk of that is coming from the institutional market. And we've seen this in prior cycles as well. I think the individual investor can sometimes get caught up in the noise. And the institutional investor who has a longer-term view is going to be looking at this period of dislocation and disruption, seeing the good fundamental performance in their portfolio, and they're actually allocating more quickly into this pocket of volatility.
That said, do you expect that we're going to get another news cycle where redemptions exceed the 5% for so many of these funds and so we end up discussing it on air and it brings up yet again a concern overall for the industry?
We're absolutely going to talk about that because people can't seem to want to talk about anything else. You have to contextualize what's happening in the wealth channel. So if you look at our fundraising, we continue to see inflows in our wealth business. We have eight semi-liquid funds, two of which are in US direct lending. Those continue to see higher redemption queues, but we actually raised $4 billion gross in the quarter, which was more than we raised in the fourth quarter. So the wealth demand for European private credit, infrastructure, private equity, secondaries, all the other things we do is still quite healthy. So I think it will stabilize. You also have to understand the wealth channel represents less than 10% of the flows in private credit. So even while we're seeing this redemption queue building, the institutional market is not.
But on the call you were very specific in terms of redemptions came, I think you said, from family offices and smaller non-US institutions, not the typical retail high net worth advisor clients. What is that saying about this wealth channel and the structure of what's going on?
So much, and we've talked about this before, this pocket of volatility, so much of what's happening is you have a major secular shift just to more alts in the wealth channel and all of the large platforms continue to push to see increased access and increased consumption within their client base. Part of our job in partnership with the big platforms is to educate the advisors who can then educate their clients. And if you look at the large platforms with well-advised high-net-worth clients, they're holding when it comes to this private credit noise in non-traded.
Arougheti, M. (2026, May 15). CEO Michael Arougheti on Market Volatility and the Strength of Ares’ Business Fundamentals [Interview transcript]. Ares Management. CEOInterviews.AI. https://ceointerviews.ai/interview/918780/
MLA
Michael Arougheti. "CEO Michael Arougheti on Market Volatility and the Strength of Ares’ Business Fundamentals." Ares Management, 15 May. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/918780/.
BibTeX
@misc{arougheti2026_918780,
author = {Michael Arougheti},
title = {CEO Michael Arougheti on Market Volatility and the Strength of Ares’ Business Fundamentals},
howpublished = {Interview transcript, Ares Management. CEOInterviews.AI},
year = {2026},
month = {may},
url = {https://ceointerviews.ai/interview/918780/},
note = {Speaker-attributed transcript with timestamps}
}
