These requests were largely confined to small institutions and family offices based outside the United States. Arougheti addressed the figures during the Morgan Stanley U.S. Financials conference in New York, clarifying that the outflow did not represent a broad exit by the firm’s domestic client base. The company had previously characterized the source of these redemptions as coming from select geographies.
Ares CEO Defends Private Credit Stability Amid Redemption Requests
Redemption requests hitting the Ares private credit fund earlier this year originated primarily from international investors rather than the U.S. market. CEO Michael Arougheti confirmed that while 11% of the fund’s capital was subject to withdrawal demands, the pressure stemmed from a concentrated group of fewer than 5% of its total investors.
The broader private credit sector faced a turbulent start to the year as wealthy investors pulled more capital from various asset managers than they deposited. Market sentiment was dampened by lingering concerns regarding transparency, evolving lending standards, and the potential impact of artificial intelligence on heavily leveraged software companies. Despite these headwinds, Arougheti noted that the firm’s experience with these redemptions bolstered his confidence in the long-term growth trajectory of the private credit market.
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