Ares Management Corp. CEO Mike Arougheti has dismissed UBS Group AG's forecast of 15% default rates in private credit as "absolutely wrong" and "irresponsible." Speaking at the Bloomberg Invest conference, Arougheti criticized analysts who lack market experience for making such predictions about the $1.8 trillion private credit industry.

Arougheti pointed out that even during the 2008 financial crisis, private credit portfolios experienced only 8% to 10% default rates. He argued that a 15% default scenario would devastate the broader market, stating that "everything else in your portfolio, I assure you, is going to be completely torched." The UBS warning has intensified fears about private credit exposure to software firms vulnerable to artificial intelligence disruption.

Concerns have been particularly acute in the retail market, where Blue Owl Capital Inc. recently restricted withdrawals from a retail-focused private credit fund. Blackstone Inc.'s flagship private credit fund has also faced record redemptions. Arougheti suggested these issues stem from retail products being misunderstood, noting they were never designed to be liquid investments.