Ares CEO Sees Direct-Lender Financing Deals Reaching $5 Billion

Ares Management Corp., one of the dominant players in private credit, is now underwriting deals as large as $3 billion and could before long provide loans for as much as $5 billion to a single borrower, Chief Executive Officer Michael Arougheti said.

Private-equity firms are increasingly bypassing syndicated loans arranged by banks and turning to direct lenders, usually at a higher cost. The reasons include speed of execution, confidentiality or a need for unconventional financing.

“It’s accelerating,” Arougheti said at the Bloomberg Invest Global Summit on Wednesday in New York. “There are clear circumstances where the private markets, even ...