Episode summary
Ares Management's CEO on Public Markets, Private Equity, and More | At Barron's
At Barron's
· · Hosts: Andy Serwer · Guests: Mike Arougheti
Summary
Mike Arougheti said Ares Management has become a nearly $600 billion private-markets platform by keeping the business simple, staying a pure-play asset manager, and growing consistently across private equity, real estate, infrastructure, and private credit. He argued that Ares’ public-market valuation has been helped by that clarity, its long record of roughly 25% compound annual growth over 25 years, and the fact that investors can understand its role in the global economy.
Arougheti was broadly upbeat on the expansion of private assets into retirement plans and retail channels, saying he supports broader access so long as governance and investor protection are strong. He pushed back on the idea that firms are simply selling lower-quality assets to individuals, arguing instead that the real constraint is the supply of new private assets. He also said sports investing has become institutionalized since COVID, with leagues opening up to capital and sports assets producing non-correlated returns and close to 15% annualized performance over 15 years. On public markets, he said equities look fully valued, while Ares is guiding to $750 billion plus of AUM and 16% to 20% annual growth.
Key takeaways
- Mike Arougheti said Ares is a pure-play asset manager and has grown to close to $600 billion of AUM across private equity, real estate, infrastructure, and private credit.
- He said public equities are fully valued and that active stock picking is getting harder because of market concentration, passive investing, and algorithmic trading.
- Arougheti supports bringing private markets into 401(k)s and retail channels, but says governance and investor protection must come first.
- He argued the main bottleneck in private markets is not demand but the supply of new assets such as companies, apartment buildings, data centers, and consumer loans.
- He said sports investing moved from a bank-and-rich-people model to institutional capital after COVID, and that sports assets have compounded at close to 15% a year over 15 years.
- Ares is guiding to $750 billion plus of AUM and 16% to 20% annual growth, which he said supports the firm’s public valuation.
Notable quotes
“the firm is close to $600 billion of assets under management in what broadly uh the markets define as alternatives”
“I think what I learned and and it's reflecting the valuation being in the public markets is fundamentally different than being in the private market”
“I think the public equity markets today are fully valued. I don't want to say that they're overvalued”
“I feel great about it because I don't understand why a large institution should have access to a differentiated investment and an individual shouldn't”
“the market is not short on demand for private markets assets. The market is short on the ability to create private market assets for people to invest in”
How the episode opens
Mike. So, um, we're following Jane Goodall, right? — That's a that's a tough act to follow. — No more monkey business. — Talk about private equity saving the world, right? — Yeah, exactly. Okay, that wasn't so good. Um, all right. Um, hello everyone and welcome to At Barrens. My name is Andy Sir. I'm the editor at large at Barren and this is an interview with Michael Aragetti who is the CEO of Aries Management. Mike, great to see you.
It's great to be here. Thank you. Thanks for the invite. — Um, so for those of you who aren't familiar with Aries, Mike, why don't you give them an idea about what the firm is all about?
Sure. So, the firm was founded in 1997. Uh today the firm is close to $600 billion of assets under management in what broadly uh the markets define as alternatives or said differently private markets investing.
Uh we have marketleading businesses around the globe in private equity, real estate, infrastructure, private credit uh and have really been enjoying a secular growth trend that's happening in private markets as well as I think a couple things that we've done well to to capitalize on that trend. Uh we have about 4,000 employees in 40 offices in 20 countries around the globe. Uh and so I think that positions us uniquely to, you know, have a lens into the real economy on on a global basis.
Yeah. I mean, you can make the argument that your firm is a little lower profile than KKR or Blackstone. On the other hand, for those of you who follow the markets, Aries stock has been the top performer in the sector. Yep. And you also have a higher valuation than these other guys.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- public markets
- private equity
- investing strategies
- professional sports investing
- career insights
Companies and tickers mentioned
- Ares Management
Watch the episode
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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