Ares Management CEO: ‘The wheels are in motion' to bring private investments into 401(k)s

Core Viewpoint - Aries Management reported higher profit and revenue in Q3, driven by improving credit quality, record fundraising, and increased investment activity across its platform [1][2]. Fundraising and Revenue Growth - The company achieved record fundraising, raising $105 billion over the last 12 months, including a $30 billion quarter [3]. - The wealth management segment raised approximately $12 billion year-to-date, contributing significantly to overall growth [4]. Market Trends and Structural Shifts - There are long-term secular tailwinds in private markets, with a notable shift towards private credit, wealth management, insurance, and digital infrastructure [5]. - Market share consolidation is evident, with limited partners allocating more capital to fewer large platforms [5]. Investment Activity - Aries Management experienced a record deployment quarter, deploying about $40 billion across various sectors, including secondaries, digital infrastructure, and private credit [6]. Credit Quality and Risk Management - The company maintains a low non-accrual rate of approximately 1% at fair value, indicating strong credit quality [9]. - Concerns about underwriting standards and potential fraud in specific market segments are acknowledged, but the overall data does not suggest a late-cycle environment [8][10]. Private Credit Market Dynamics - The private credit market is highly concentrated, with 65% of capital held by the largest managers, which may mitigate risks associated with smaller players [12]. - The company emphasizes that private credit exposures are positioned high in the capital structure, reducing the likelihood of significant losses [14]. Regulatory Developments - There is a movement towards allowing private investments in 401(k) plans, which is expected to diversify fundraising channels and broaden access for individual investors [18][19].