Ares Management, a major player in private credit, is reportedly close to finalizing a $2 billion loan deal, a significant move in what has been a subdued year for the private credit market. This potential deal highlights Ares's continued activity and its ability to secure large transactions despite a slower overall environment for such financing. The firm's CEO, Michael Arougheti, has noted a strong and consistent institutional demand for Ares's credit strategies, suggesting that while the broader market might be slow, top-tier firms like Ares are still attracting substantial interest and deployment opportunities.
This development comes as Ares recently announced record fundraising, securing $36 billion in the second quarter of 2026. Inflows were primarily driven by its credit segment, which attracted $23.7 billion, alongside $9.7 billion for real assets and $3.9 billion for its wealth platform, representing a 15% year-over-year increase. The firm's assets under management (AUM) surged by 17% to $671.3 billion, and fee-related earnings saw a 20% increase to $491.1 million from the previous year, demonstrating robust growth despite market conditions.
The firm's uninvested capital also reached a record $170 billion, a 13% jump, positioning Ares for significant future investments. Arougheti also mentioned that weaker flows from the wealth channel are leading to less competition, creating opportunities for Ares to achieve excess returns in private credit. Analysts like Chris Kotowski from Oppenheimer have praised Ares's solid investment performance and fundraising efforts. The firm's flagship asset-based finance fund alone raised $8.5 billion during the quarter, further solidifying its market position and potential for future earnings growth.
In the second quarter of 2026, Ares's Credit funds closed U.S. direct lending commitments totaling approximately $8.2 billion across 69 transactions, and $52.3 billion across 347 transactions over the 12 months ending June 30, 2026. This activity underscores Ares's active role in direct lending, with CEO Michael Arougheti pointing out that institutional investors remain under-allocated to private credit and are actively seeking opportunities for excess returns in a market where spreads have widened and competition is reduced. The firm also observed an increase in direct lending activity, with confidentiality agreements rising by 35% quarter-over-quarter and new deals in its pipeline climbing by 30%, indicating a potential strengthening of M&A-backed lending in the latter half of 2026.
