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Liquid Credit’s Instability Benefits Private Lenders, According to Ares Management

Recent disruptions in the credit markets, highlighted by the collapses of First Brands Group and Tricolor Holdings, have sparked intense scrutiny regarding the risk levels within private debt portfolios. However, executives at Ares Management Corp. view these setbacks as a silver lining for private credit, suggesting that the current climate could open doors for lucrative investment opportunities.

Ares Management believes that the recent turmoil in the credit sector not only underscores the resilience of private lending but also enhances its attractiveness to investors. As traditional credit markets face uncertainties, private lenders are well-positioned to capitalize on the situation by acquiring distressed assets and expanding their portfolios.

The executives emphasize that while the failures may raise concerns about risk, they also highlight the potential for higher returns in the private credit space. With a strategic approach, private lenders can navigate this volatility, making it an opportune time to pursue new deals and strengthen their market presence.

In summary, the challenges faced in the credit markets are not just a cause for alarm but also a potential boon for private lenders, as they seek to leverage the situation to their advantage.

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Source: Original