Ares Management Corp (NYSE:ARES) is unfazed by a recent wave of market skepticism over private credit.

On the alternative investment manager’s fourth-quarter earnings call Thursday, co-founder and chief executive officer Michael Arougheti said the risks related to the emerging asset class have been exaggerated, adding the firm has continued see robust net inflows.

"With some of this, in my opinion, overblown noise around private credit, you are seeing some outflows, but on a net basis, inflows are still quite strong. And what we're hearing on the ground from advisors [is they] are looking to take advantage of the liquidity opportunity," he said on the call.

Arougheti noted that redemption queues are largely being driven by a small group of investors eager to "get to the front of the line." Ares saw "very strong flows" of $1.2 billion in January and is seeing similar momentum in February, he added.

"The demand is broad‑based. We're seeing good flows in the private credit product, good flows in the core infrastructure product, and that's been a big bright spot for us," he said.

The executive also emphasized that even a modest slowdown—though not expected—would not affect the firm's ability to generate profit from fee‑paying assets under management or fee‑related earnings.

Ares Seeks To Grow Its Private Equity Platform 

Arougheti said Ares is looking to expand its private equity platform. While no deal is imminent, the firm is evaluating companies that align with its culture and would be strategically accretive.

"The argument for getting bigger in PE is given the size of our global business and how deep we are with the largest allocators, it's an asset class that people want to be invested in. Obviously, we've been in the business for 20-plus years with our own strong track record, but we're not keeping up the growth pace that we are with the rest of the business," he said.

He added that a larger private equity footprint would allow Ares to "add value" across other areas, including direct lending and its minority‑stakes business.

"Most importantly as the world continues to move and consolidate, you are going to see the bigger players in private equity get bigger," Arougheti said.

Software Exposure Is Not A Risk For Ares

The CEO also addressed analysts’ questions on Ares’s exposure to the software sector, which has seen much turbulence in public markets of late, noting the firm is entering 2026 in a position of strength. 

"Anytime there's a material disruption in any industry, there's always two sides of the coin. Our opportunistic credit and secondaries business should see more investment opportunities, which provides a natural hedge. And an acceleration in AI adoption should actually be a meaningful contributor to management fee and earnings growth overall for Ares, as our digital infrastructure business would generate meaningful AUM, management fees, and FRE growth," he said.

Arougheti believes the business is "well prepared" to navigate any market challenges including software-related risks. 

Ares’s software portfolio is "highly diversified" with only a "very small" percentage facing a high risk of AI disruption, he said, adding the firm sees "no change" to its earnings growth outlook from such risks. 

Overall Performance

The firm outlined its 2025 growth, with total assets under management surging 29% to $622.5 billion.

This increase was primarily due to commitments in its drawdown fund, the third opportunistic credit fund, capital raised by its perpetual capital vehicles, credit BDCs, as well as the acquisition of GCP International and additional managed assets from the company's insurance platform.

Ares currently sits with $156 billion in dry powder, an increase of $23 billion, or 17%, from the prior year. This was primarily due to commitments in its infrastructure, opportunistic credit, infrastructure secondaries, credit secondaries and real estate strategies, as well as the acquisition of GCP International.

Of that, $5.2 billion sits in its private equity segment, while $15 billion is in its secondaries segment.

Ares Management stock was down 9.5 percent Thursday, taking its year-to-date losses to 23 percent.

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