Michael Arougheti, co-founder and CEO of Ares Management, said the private-credit market remains strong despite recent volatility in the financial sector.
This assertion comes as investors weigh the stability of non-bank lending amid broader economic shifts. The distinction between private credit and private equity is critical because the former provides the debt that often funds the latter's acquisitions.
Speaking at the Forbes Iconoclast Summit in New York, Arougheti said the private credit market is not broken. He said recent stress in the sector is tied to challenges within private equity activity rather than a fundamental flaw in the credit market itself.
"The private credit market remains strong; the recent stress is tied to private equity," Arougheti said.
To support his claim of resilience, Arougheti pointed to recent capital inflows. Ares Management raised $30 billion [1] in the first quarter of 2026. This fundraising effort represents a record for the firm and suggests continued investor appetite for the asset class.
Beyond new raises, the firm is maintaining a significant liquidity cushion. Ares Management’s uninvested capital has swelled to $158 billion [1]. This reserve allows the firm to deploy capital strategically as market conditions evolve.
"Investors are navigating a more volatile environment, but private credit is not broken," Arougheti said.
While some analysts have expressed concern over the growth of private lending, Arougheti said the underlying fundamentals are sound. He said the current environment requires more careful navigation but does not signal a systemic collapse of the lending model.
“The private credit market remains strong; the recent stress is tied to private equity.”
Arougheti's comments aim to decouple the perceived risks of private equity from the stability of private credit. By highlighting a $158 billion liquidity reserve and record Q1 fundraising, Ares is signaling to the market that it has the capital to weather volatility. This suggests that while the equity side of the house may be struggling with valuations or exits, the debt side remains a viable and attractive destination for institutional capital.
