Ares Management's co-founder and CEO, Michael Arougheti, has publicly dismissed the prevailing market anxiety surrounding private credit, characterizing it as mere "overblown noise." His remarks came during the alternative investment manager's fourth-quarter earnings call, where he highlighted the firm's continued robust net inflows, driven by strong demand across various asset classes despite a challenging market sentiment. The company is also strategically focused on expanding its private equity presence and is confident in its ability to manage potential risks from its software sector investments, leveraging its diverse portfolio and substantial "dry powder" for future opportunities.
Ares Management Reassures Investors Amidst Private Credit Skepticism
In a significant financial disclosure on Thursday, February 5, 2026, Michael Arougheti, the discerning CEO and co-founder of Ares Management Corp (NYSE: ARES), firmly addressed and assuaged market jitters concerning the burgeoning private credit sector. Speaking during the firm's fourth-quarter earnings call, Arougheti categorically stated that the apprehension surrounding this evolving asset class was, in his professional assessment, "overblown noise."
Arougheti underscored the resilience of Ares Management in the face of these perceived challenges, revealing that the firm continues to attract substantial net inflows. He highlighted an impressive $1.2 billion in inflows recorded in January, with similar positive momentum observed extending into February. This financial strength, he elaborated, stems from broad-based demand, particularly noting vigorous activity within their private credit and core infrastructure product offerings.
Looking ahead, Ares Management is actively pursuing the expansion of its private equity platform. While no immediate acquisitions are on the horizon, the firm is meticulously evaluating potential companies that resonate with its organizational culture and promise strategic accretion. Arougheti articulated that an augmented private equity footprint would not only amplify Ares's growth trajectory but also foster synergistic value across its other divisions, including direct lending and its minority-stakes business.
Furthermore, the CEO tackled analysts' inquiries regarding Ares's exposure to the software sector, a segment that has recently experienced considerable volatility in public markets. Arougheti asserted the firm's robust position as it enters 2026, emphasizing that its software portfolio is extensively diversified. He assured that only a minimal percentage of these investments face a high risk of disruption from artificial intelligence, maintaining that the firm's earnings growth outlook remains unaltered by such concerns. He also noted that any significant industry disruption would paradoxically create new investment opportunities for Ares's opportunistic credit and secondaries businesses, acting as a natural hedge.
The overall performance of Ares Management remains strong, with total assets under management projected to escalate by 29% to $622.5 billion by 2025. This growth is largely attributed to commitments in its drawdown fund, the third opportunistic credit fund, capital raised through its perpetual capital vehicles, credit BDCs, and the strategic acquisition of GCP International, alongside additional managed assets from its insurance platform. The firm also boasts an impressive $156 billion in dry powder, marking a 17% increase from the previous year, with significant portions allocated to infrastructure, opportunistic credit, and various secondaries strategies, further cementing its capacity for future strategic investments. Despite the broader market trends, Ares Management's stock experienced a 9.5% decline on Thursday, contributing to a 23% year-to-date loss.
The steadfast conviction of Ares Management in the face of private credit skepticism provides a valuable lens through which to view market dynamics and strategic corporate resilience. It prompts us to consider how perceived risks can often be recontextualized as opportunities by well-positioned and strategically agile firms. This narrative challenges the conventional wisdom during periods of uncertainty, highlighting the importance of diversification, strategic expansion, and a clear vision for navigating complex financial landscapes. It serves as a reminder that market noise, while impactful in the short term, does not always reflect the fundamental strength and long-term prospects of a well-managed entity.