The Credit Edge by Bloomberg Intelligence Private Credit Giant Ares Is Seeing More Defense Opportunities in Europe
Jul 17, 2025
Mike Dennis, co-head of European credit at Ares Management, discusses how private lenders are increasingly eyeing funding opportunities in Europe’s defense sector, amid rising geopolitical tensions. He emphasizes the need to align investments with limited partners' ESG concerns while exploring trends in the European middle market and potential expansions into Italy. Dennis highlights the resilience of private credit amidst economic uncertainty and the strategic move towards selective lending, showcasing the evolving landscape of private equity.
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Robust Private Credit Valuation Practices
- Ares applies US best practices for private credit valuation in Europe for transparency and accuracy.
- Valuation processes include quarterly independent audits and detailed impairment reviews ensuring robust asset assessments.
Private Credit Thrives Despite GDP
- Low GDP growth is not a barrier to selective private credit lending to growth businesses.
- Private credit targets companies with double-digit revenue growth and high EBITDA margins, often uncorrelated with GDP.
Private Credit Demand Strong
- Investor appetite for private credit remains strong, leading to Ares' largest fundraise in 2024.
- Demand persists due to attractive yields, low volatility, and minimal losses historically.