A higher-for-longer interest rate regime impacts every asset class, and in Michael Arougheti’s case, it’s a tailwind.
Leslie Picker sat down with the Ares Management CEO just a year after their first conversation for this newsletter. Arougheti said the private credit giant is benefiting from rising rates from a relative return perspective.
From the data points from the 3,000 portfolio companies Ares lends to and invests in, he said he has seen “fundamental strength despite the rise in rates.”
It might be a different story for the public markets, especially equities, which have taken a beating from the Fed’s latest plan to keep rates higher for longer. A new CNBC Delivering Alpha investor survey showed the majority of Wall Street investors believe the stock market’s gain this year has just been a bear market bounce, seeing losses on the horizon.
Stocks have given back a chuck of 2023’s gains as the benchmark 10-year Treasury yield popped to its highest levels since 2007. Surging bond yields are not the only thing that kept investors on edge. A rally in crude oil — coupled with an economic slowdown in China and a strong U.S. dollar — have raised concern once again that a recession could take hold.
The 13th annual CNBC Delivering Alpha Investor summit will be an opportunity to hear from top investors about how they are navigating the tricky environment for various asset classes– equities, commodities, real estate, credit, alternatives and beyond.
See you there!
