A senior executive at Ares Management has dismissed recent concerns circulating around private credit markets, arguing that there is a significant gap between negative headlines and underlying portfolio performance, according to a report by Bloomberg.
Blair Jacobson, co-president of Ares Management, said in an interview with Bloomberg Television that the firm is not seeing meaningful signs of stress across its global portfolio companies, despite growing scrutiny of the asset class.
Jacobson said Ares’ portfolio of roughly 3,000 companies is currently delivering annual growth in the range of 8% to 12%, and described broader concerns about rising distress as overstated based on the firm’s internal data.
“There’s a lot of discussion and anxiety about distress — we aren’t seeing it,” he said.
Private credit has come under increased pressure this year amid investor caution, valuation debates, and broader concerns about liquidity and exposure to technology-driven disruption. Some funds have also faced redemption pressures, prompting tighter controls on withdrawals in certain cases.
Jacobson noted that non-accrual rates across Ares’ lending portfolio remain below historical levels, suggesting limited deterioration in credit performance. He also pointed to macroeconomic conditions – including expected GDP growth in the US, Europe and the UK – as supportive for borrowers.
He added that higher interest rates, while a source of volatility, have not translated into widespread credit stress across the firm’s holdings. Because much of private credit is structured with floating rates, he argued that higher base rates can ultimately enhance returns for investors while remaining manageable for portfolio companies.
Jacobson also suggested that reduced capital inflows into the asset class could have a stabilising effect, as lower competition may allow lenders to price risk more appropriately and apply more conservative underwriting standards.
He downplayed concerns about systemic issues in private credit fundraising, including recent instances of redemption restrictions at some funds, and maintained that current market conditions remain “mathematically comfortable” for borrowers across Ares’ platform.
