Arougheti Sees 'Meaningful Acceleration' in Deal Flow

Let's start with the environment, this higher interest rate environment on the precipice of maybe a rate cut this year, how it impacts the way that you're thinking about investing. I think one of the reasons why people are drawn to private credit aside from the fact that it's had durable performance for a very long time and it's a growing market is most of most private credit instruments are floating rate. So almost perversely, the higher rates go and the longer they stay high, the better the return performance, right. So clearly a lot of capital is being just drawn to the the IRR opportunity. On the flip side is rates stay high, it contracts the deal environment. And so there's always this tension or balance between wanting to see the deal machine turn on to drive velocity of capital versus benefiting from high rates. And we're, we're kind of getting to a sweet spot right now. I think now that rates have stabilized and that cuts are on the horizon, we are seeing the pipeline pick up meaningfully, which means you should start to see more deals, more velocity. And even if the base rate comes down, it's still going to offer a pretty attractive ring. Let's talk more about that. What was interesting is we spoke to the audience a little earlier. We put up a poll and more than half of the audience believes that deals will meaningfully slow down. And So what are the signs of a pickup? How meaningful could that pick up be? Well, the 1/2, the people thought deals were going to slow, right? Interesting. I think in the private markets, what really drives flow is the the weight of capital is the way that I think about it. I mean, most institutional equity that supports the private deal environment is has a time limit on it, three to five years to invest. And obviously you're always trying to find the right opportunity to invest where you can benefit from. Earnings or cash flow growth and capture multiple expansion. We're in this, this time now where people have been on the sidelines for quite some time. Investors are clamoring to get capital back. So that creates some, you know, some tension for people to start to monetize performing companies. And as the dry powder ages, there's also a catalyst for, for deal opportunities. So I can only say in our pipelines, we're seeing a meaningful acceleration and deal flow. So I, I would actually take the other side of the of the trade percentage.