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Private credit to double in five years, says Ares CEO

The $1.5tn global private credit market will double to $3tn within the next five years, with most of the increase coming from bank balance sheets, according to a report by Bloomberg, citing Ares Management boss Mike Arougheti.

The report quotes Arougheti as saying at the Global Credit Forum at Bloomberg’s office in London this week, that: “We’re still massively overbanked. The reality is, if all we do is finance the existing equity in the market, we will get [to the next $1.5tn]”.

Arougheti is also predicting an increase in the size of private credit deals which, given current capacity in the private credit market, he believes could mean an $8bn to $10bn club deal.

The current private credit record stands at $5.3bn in the form of a loan package funding Vista Equity Partners’ refinancing of fintech firm Finastra Group Holdings Ltd.’s debt in August. That deal was led by Oak Hill Advisors and Blue Owl Capital and was made up of a group of at least 15 lenders including Ares.

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