Michael Arougheti, the CEO of Ares Management, appeared on Exchanges at Goldman Sachs to defend the structural integrity of non-traded business development companies. He pushed back against labeling liquidity limits as "gates," noting that "the non-traded BDC structure was set up to do was to say you're owning illiquid assets the same way you would if they were in a commingled fund."
The conversation turned quickly to systemic risk, with Michael Arougheti dismissing fears of a looming credit collapse. He argued that "there's nothing that we are seeing generally indexed across the credit markets that says we're entering a credit cycle." While he acknowledged that underperforming managers exist, he insisted that isolated failures do not imply that "the entire credit market is about to tip over."
Looking ahead, Michael Arougheti maintains a bullish outlook on industry growth, suggesting that current volatility serves as a catalyst for market share shifts. He stated, "whatever volatility is getting introduced by this narrative is actually creating fundamental opportunity for folks who are able to cut through the noise." With reports indicating he is open to acquiring a large private equity manager to scale the firm, Ares Management appears positioned to capitalize on the very consolidation he predicts.
