Ares Management co-founder and CEO Michael Arougheti says the recent stress in the private credit market is tied to private equity. He speaks with Dani Burger at the Forbes Iconoclast Summit in New York.
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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 state of private credit and private equity, arguing that recent redemption activity in partially liquid funds reflects investor psychology rather than underlying stress. He noted that such funds represent only 10-15% of the private credit asset base and that performance remains strong, with Ares growing 25-30% year-on-year. He dismissed concerns about private equity valuation problems, attributing the situation to a transition from a zero-interest-rate era, with roughly 30,000 companies held at outdated multiples. Arougheti highlighted the use of secondary solutions and refinancing to address capital structure mismatches. On AI data centers, he saw no over-leverage, citing equity-driven capex from hyperscalers and structured asset-level debt, though he flagged capital, energy, and water constraints. Finally, he discussed sports investing, noting that combining personal ownership and Ares' platform improves investment decisions.
Key takeaways
Redemption activity in partially liquid funds is investor psychology, not stress; such funds are only 10-15% of private credit assets.
Ares is growing 25-30% year-on-year, showing strong institutional demand for private credit.
Private equity is not broken but transitioning; about 30,000 companies are held at multiples from a lower-rate era.
Ares uses secondary solutions and refinancing to unclog the private equity system.
0:00Do you, in your mind, have things quieted down, or is there still stress that needs to be worked through?
1:46Do you think that there is a private equity problem specifically that needs to be discussed?
2:31But isn't it just the good stuff being sold right now?
3:42It's just on my mind because not only the Partners Group, but I had a banking executive say to me the other week that private equity is broken because they're all sitting on these aging assets and unable to sell them. Is that not a problem?
What a year it's been for you. It's only June, and it probably feels like a decade for you. I know things have quieted down on private credit, but you still get glimmers of it. Two funds specifically called out for redemptions, putting dates. Do you, in your mind, have things quieted down, or is there still stress that needs to be worked through?
I don't think it's stress. I think there's education that needs to get worked through. With each quarter of redemption, people are going to begin to differentiate between people asking for redemption in a partially liquid fund versus underlying performance and fears of stress in the private credit markets. The corner of the private credit world that sits in these illiquid funds is tiny—it's about 10 to 15% of the entire private credit asset base. So to just be talking about this disconnected from the broader institutional market is a missed opportunity. When you look at the underlying performance, it's delivering exactly the investment outcome that these investors signed up for. I think it's more of a conversation about investor psychology and behavior within these structures than an indictment on private credit. It did calm down when we had earnings and the market saw that folks like us were growing 25 to 30% year on year. The institutional investor was seeing this as a huge opportunity to come into a market that was maybe seeing liquidity come out of it and returns were improving. It's just going to take a little bit of time for people to see the performance, demonstrate that durability, and then the way people are perceiving this redemption fuel will likely change.
It's the great irony of Ares—every quarter raises some new record fundraising figures. So point very well taken. The news this morning, though, and of course we've never asked you to comment directly on a competitor, but Partners Group is interesting because it is an evergreen fund and it does have equity in it. There is a real conversation happening right now of our marks honest? Is this a system that's really gummed up because marks aren't honest? Do you think that there is a private equity problem specifically that needs to be discussed?
I don't think there's a private equity valuation problem. Valuations have been coming down to reflect the current reality. One of the disconnects is that the private equity deals that are getting done are getting done at multiples that are consistent with where people are holding their assets.
I don't think so. I think it's more than that. It's about sector, how aged it is, where somebody is in their fund life, where are they in their business plan. We all try to simplify a lot of really complicated things into headlines and sound bites, and I don't know if it's that easy. Part of this private credit thing, and it's not meant to be disparaging, is to talk about private credit in the context of private equity. One of the things that we've tried to highlight is that the private credit market sits at about a 40% loan to value, meaning it's underpinned by a significant amount of private equity. So if you want to talk about stress in private credit, you have to talk about stress in private equity. That may be a little bit of the headline today, but I actually don't think so. I think what's happening is that the folks that own these funds are looking at it and saying, even if I'm generating the return that I wanted, I might as well just go get my money back because life's too short. I don't know if that's healthy or not, but I think it's more about just investor psychology than an understanding of what the real risk and return is there.
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Arougheti, M. (2026, June 3). Ares CEO Arougheti on Private Credit, Sports Investing [Interview transcript]. Bloomberg Television. CEOInterviews.AI. https://ceointerviews.ai/interview/960750/
MLA
Michael Arougheti. "Ares CEO Arougheti on Private Credit, Sports Investing." Bloomberg Television, 3 Jun. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/960750/.
BibTeX
@misc{arougheti2026_960750,
author = {Michael Arougheti},
title = {Ares CEO Arougheti on Private Credit, Sports Investing},
howpublished = {Interview transcript, Bloomberg Television. CEOInterviews.AI},
year = {2026},
month = {jun},
url = {https://ceointerviews.ai/interview/960750/},
note = {Speaker-attributed transcript with timestamps}
}
