Jun. 4 at 10:17 PM
Ares Management pushed back against growing concerns over private credit, with co-president Blair Jacobson saying there is a “real disconnect” between negative headlines and the performance of the firm’s portfolio companies. He noted that Ares’ roughly 3,000 portfolio companies are still growing 8%-12% annually and that non-accrual rates remain below historical levels.
Private credit has faced heightened scrutiny this year amid large retail investor redemption requests and concerns over valuations and AI-related disruption. However, Jacobson said Ares is not seeing significant distress and views the broader economic backdrop as supportive, with expected GDP growth across the U.S., Europe, and the UK.
He added that reduced capital inflows into the sector may actually benefit lenders by lowering competition, allowing for higher interest rates, more conservative loan structures, and stronger documentation.
$ARES