Ares’ Arougheti Sees More Deals as PE Investors Clamor for Cash

Mike Arougheti, chief executive officer of Ares Management Corp., during the Bloomberg Invest event in New York, US, on Wednesday, June 26, 2024. The conference invites leaders in asset management, banking, wealth, and private markets to track, dissect, and predict the future's greatest changes, risks and opportunities.

(Bloomberg) -- Ares Management Corp. Chief Executive Officer Mike Arougheti said the firm’s pipeline for lending to middle-market buyouts — a key business area — is growing as private equity sponsors look for cash.

“Investors are clamoring to get their money back,” he said Wednesday at the Bloomberg Invest conference in New York.

There’s about $1.5 trillion of private equity dry powder waiting to be put to work and $3.5 trillion already “in the ground,” Arougheti said. Managers are deciding whether to put their available capital into existing companies or deploy it for new opportunities, he said.

Investors on Wall Street have been divided over whether trouble lurks in private credit as interest rates remain higher.

Ares isn’t seeing any cracks in private credit, Arougheti said. The firm has close to 4,000 middle-market investments, and credit performance has remained strong, he said.

“We feel pretty good about it,” Arougheti said, calling concerns about credit “a little bit overblown.”

Maintaining the performance of its credit book will be essential for Ares as it builds assets under management to its goal of $750 billion by 2028, from $428 billion at the end of the first quarter.

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