Michael Arougheti, the Chief Executive Officer of Ares Management, provided a detailed outlook on the future of private credit and alternative investments during a recent appearance at a Bank of America conference. His remarks painted a picture of a firm that is not only weathering the current economic transition but is actively positioning itself for a significant surge in transaction volume over the next twenty-four months.
Central to Arougheti’s thesis is the expectation of a robust deal pipeline maturing by 2026. He noted that the backlog of private equity exits and the increasing demand for sophisticated capital solutions are creating a pressure cooker of activity that will likely boil over in the coming years. As interest rates begin to stabilize and the gap between buyer and seller expectations narrows, Ares expects to see a substantial uptick in deployment opportunities across its credit, real estate, and private equity verticals.
Beyond the macroeconomic forecast, the Ares Management chief spent a significant portion of his presentation detailing how the firm is modernizing its internal operations. The focus is squarely on artificial intelligence, which Arougheti views as a foundational shift rather than a temporary trend. Unlike many firms that are still in the experimental phase, Ares is actively integrating AI tools to streamline its underwriting processes and enhance its proprietary data analysis.
This technological push is designed to provide Ares with a competitive edge in a crowded market. By leveraging AI to parse through thousands of potential deals and historical performance metrics, the firm aims to identify risk factors and growth potential with a speed that traditional methods cannot match. Arougheti emphasized that while human judgment remains the final arbiter of any investment decision, the data-driven insights provided by these new tools are becoming indispensable for maintaining high-yield performance in a complex global economy.
The strategy also extends to how the firm interacts with its portfolio companies. Ares is increasingly encouraging the businesses it funds to adopt similar technological efficiencies, creating a network effect that improves the overall health of its investment ecosystem. This dual approach—optimizing internal investment decisions while driving operational improvements in the field—is expected to be a primary driver of value creation as the 2026 deal pipeline begins to manifest.
Investors at the conference were particularly interested in how Ares plans to navigate the shifting landscape of private credit. Arougheti remained confident that the secular tailwinds favoring non-bank lending remain strong. As traditional banks continue to face regulatory constraints and remain selective in their lending practices, private credit providers like Ares are stepping in to fill the void for middle-market companies and large-scale corporate borrowers alike.
Looking ahead, the combination of a favorable deal-making environment and a sophisticated technological infrastructure suggests that Ares Management is preparing for a period of sustained growth. The firm’s proactive stance on artificial intelligence integration and its long-term vision for market liquidity position it as a leader in the next phase of alternative asset management. As the industry moves toward 2026, the market will be watching closely to see if Arougheti’s predictions of a deal-making renaissance come to fruition.
