Ares Management (ARES) Morgan Stanley US Financials Conference 2026 summary

Macro environment and market outlook

• Inflation and interest rates remain persistently high, but this is now better understood by the market and can benefit certain alternative asset classes, especially private credit structured around short-term rates.

• Fundamentals across portfolios remain strong, with corporate EBITDA growth around 10% and high real estate occupancy rates (95%-98%).

• Leading indicators such as revolver draws and credit performance show no signs of distress or abnormal liquidity hoarding.

• Credit performance remains robust, with low net charge-offs and delinquencies compared to historical cycles.

Deployment and investment opportunities

• Deployment capacity is broad-based across geographies and asset classes, with record pipeline levels and $150 billion in dry powder.

• Most active deployment areas include European direct lending, asset-based finance (ABF), digital infrastructure, and secondaries, with U.S. direct lending activity picking up.

• Growth in permanent capital and open-ended vehicles supports positive momentum in gross-to-net deployment metrics.

Private credit market dynamics

• Private credit is diversifying beyond sponsor-backed lending into real estate, infrastructure, ABF, and secondaries, with sponsor lending becoming less dominant.

• Portfolio metrics show strong credit quality: loan-to-value at ~45%, interest coverage ratios in the low 2s, and non-accrual rates well below historical averages.

• Institutional demand for private credit is strong, driven by underinvestment and attractive risk-adjusted returns, while wealth channel growth is less impactful on overall profitability.