Bloomberg Talks Michael Arougheti Talks Tariffs, China
May 6, 2025
Michael Arougheti, CEO and co-founder of Ares Management, dives into the intricate impacts of trade tariffs on businesses and how companies adapt by focusing on local markets. He reveals the shifting economic ties between the U.S. and China, pinpointing emerging investment opportunities in Asia-Pacific. Arougheti also discusses the evolving private equity landscape post-COVID, tackling high valuations and the push for liquidity solutions amidst a challenging IPO and M&A climate. Get insights into where he sees tremendous potential for growth!
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Middle Market Insulated from Tariffs
- Ares Management mostly invests in middle market service companies with local market focus, making them less affected by tariffs and supply chain issues.
- Longer trade tensions could have broader economic effects, but direct impacts on their investments are minimal so far.
Middle Market Firms Have Mixed Risks
- Middle market companies may be more insulated from cross-border tariff impacts than larger ones.
- However, a recession environment will disproportionately affect middle market firms, showing mixed risks.
China Investment Impact Limited for US Investors
- US dollar investors have not invested heavily in China in recent years, so tariff escalation has limited disruption.
- Global supply chains are shifting with nearshoring and China plus one strategies benefiting some businesses.