Ares Management CEO Arougheti on Private Markets and Concerns for 2019

The video discusses the strong U.S. economy and the growth of private markets, which are now outpacing public markets. Post-financial crisis, investors have shifted towards illiquid assets, valuing yield and taking on illiquidity risk. The private credit market has evolved significantly, with increased competition but still offering attractive returns. Interest rates and market volatility are key concerns, with rising rates potentially benefiting floating rate assets but also posing risks if they rise too quickly.

What is one reason for the positive sentiment in the market according to the speaker?

• The strong fundamental footing of the U.S. economy

• The decrease in private market investments

• The decline in public market growth

• The lack of liquidity in asset classes

What shift in investment strategy occurred after the financial crisis?

• A move towards more liquid assets

• A decrease in private credit investments

• A focus on short-term investments

• An increased willingness to take on illiquidity risk

How has the private credit market evolved over the past six years?

• It has emerged as a distinct asset class

• It has remained unchanged

• It has seen a decline in investor interest

• It has become less competitive

What is a potential concern when interest rates rise too quickly?

• Increased cash flow

• Enhanced market stability

• Constrained cash flow leading to stress

• Higher returns without risk

What does the speaker suggest about market shocks like the one in Q4 2018?

• They are unlikely to occur again

• They have no impact on market structure

• They provide opportunities for certain investment strategies

• They are always detrimental to investors