Ares Management CEO Mike Arougheti discussed the role of private capital in market stability and the impact of AI during a May 4 interview [1].
These insights come as private equity continues to integrate into diverse sectors, including the sports ecosystem, and as AI-driven disruptions force a reevaluation of credit risk and market stability.
Speaking on CNBC’s ‘Squawk on the Street,’ Arougheti said how private capital supports the emerging new economy [1]. The firm has seen significant growth, with total assets under management reaching $644 billion [2] and fee-paying AUM at $400 billion [2].
Arougheti highlighted the company's aggressive growth trajectory. He said, "We are on track for another record year of fundraising as we raised $30 billion of gross commitments" [3]. This follows a period of strong activity where the firm's M&A activities performed better than hoped [4].
Despite the growth, the CEO addressed potential volatility in the private-credit markets. While some reports suggest AI disruptions are adding pressure and could lead to heightened stress [1], Arougheti has maintained a more stable outlook. He said, "There's nothing to suggest a major default cycle in private credit right now" [5].
Ares is currently managing a significant amount of liquidity. The firm holds $158 billion in uninvested capital [3] and has set a target fee-related earnings compound annual growth rate of 16% to 20% for 2026 [2].
The CEO said that private capital serves as a stabilizing force during periods of economic transition. He noted that the ability to deploy large sums of capital allows firms like Ares to navigate disruptions that might otherwise destabilize more traditional funding markets [1].
“"There's nothing to suggest a major default cycle in private credit right now."”
The contrast between Arougheti's confidence and the potential for AI-driven credit stress highlights a pivotal moment for private equity. As Ares prepares to deploy $158 billion in dry powder, the firm's ability to accurately price risk amid technological disruption will determine if private credit remains a stabilizer or becomes a source of systemic vulnerability in the new economy.
