Ares Says Private Debt Still Has Deal Flow

Mark Liggitt and Tyrone Cooney, speaking at the Picton Latam Summit 2026, sought to separate headline risk from underlying market conditions. Liggitt said media coverage often differs from what is happening in the market, adding that Ares continues to see deal flow in both Europe and the US, where the business is geared largely toward institutional and permanent capital.

Cooney framed underperformance as a normal part of credit investing, saying some loans will not perform as expected when they are underwritten. But he also stressed that borrower quality comes first, followed by structure and documentation, with Ares typically seeking restrictive covenants and loan-to-value ratios of 50% to 60%.

The comments land at a sensitive moment for private debt. Defaults have already rattled some international funds, while tighter financing conditions and aggressive pricing in the middle-market segment are forcing lenders to walk away from deals that do not compensate for the risk. Liggitt said Ares has passed on opportunities where spread levels are too aggressive, even when other credit metrics look solid.

That stance is important for investors because the private debt boom has been built on the promise of stable income with limited mark-to-market volatility. If lenders start chasing yield by loosening terms, the sector becomes more vulnerable to the same kind of credit stress now showing up in other corners of leveraged finance.

For Ares, the takeaway is that the firm wants to position itself as a disciplined buyer in a more selective market rather than a passive beneficiary of the private-credit expansion. Investors will watch whether defaults stay idiosyncratic or spread more broadly across the asset class as refinancing pressure builds and borrowers face higher funding costs.