Ares Doubles Down on Secondaries — With Numbers to Back It Up

At the Bernstein conference, Ares CEO Michael Arougheti revisited the secondaries argument he laid out a few weeks ago — and added a few data points worth noting.

The macro backdrop at Bernstein 42^nd Annual Strategic Decisions Conference was noisier than earnings season: geopolitical uncertainty, oil supply shocks, sticky inflation, and rising stagflation risk. But Arougheti’s conviction on secondaries was unchanged. If anything, the volatility reinforced it.

Michael Arougheti is a Co-Founder, the Chief Executive Officer and a Director of Ares Management Corporation.

The operational scorecard on Landmark

A few weeks ago, Arougheti made the structural case for why Ares built its secondaries platform when it did. At Bernstein, he added a concrete milestone: since the Landmark acquisition roughly five years ago, Ares has doubled both the profitability and the AUM of the secondaries business. That number had not been stated publicly in those terms before. It puts a specific operational floor under what had previously been a thesis-level argument.

GP-led at nearly 50% — and the competitive moat behind it

The GP-led shift was central to the Q1 earnings call narrative. At Bernstein, Arougheti reaffirmed it: GP-led transactions now represent close to half of total secondaries deployment, a structural transformation he described as unlikely to reverse. What he added at Bernstein was the explicit competitive framing: the skillset required for GP-led — asset-level underwriting, deep and trusted relationships with the global GP community — is fundamentally different from buying LP portfolios at a discount. Ares, he argued, runs “probably the largest” GP coverage team in private equity and real assets of any secondaries platform. That claim, stated plainly, didn’t appear in the earnings call commentary.

Q1 pipeline: secondaries held up while direct lending slowed

On the earnings call, Arougheti made the counter-cyclical case for secondaries in broad strokes — volatility generates deal flow rather than suppressing it. At Bernstein he made it specific: Q1 activity in U.S. direct lending was slow, but secondaries was explicitly named as one of the areas seeing “real strength” in the pipeline, alongside asset-based finance and digital infrastructure. The diversification point is not new, but the direct callout of secondaries as a Q1 bright spot adds texture to the earlier argument.

Day-one markups: the debate Arougheti doesn’t think is a debate

This topic didn’t come up on the earnings call but got airtime at Bernstein. Arougheti pushed back firmly on the framing of day-one markups as a controversial “practice.” His position: GAAP requires that assets purchased at a discount to NAV be marked up to NAV, because every other holder of those same assets carries them at NAV. It is an accounting convention, not a choice.

Within the Ares context, the exposure is limited. The vehicle where it is most relevant is APMF, the firm’s wealth-channel secondaries fund, at approximately $3 billion in AUM. Around 58–60% of that portfolio is currently LP-led — the segment where day-one markups apply. That represents less than 10% of total Ares secondaries AUM. And as GP-led exposure grows within APMF — a stated priority — that percentage is expected to come down. Day-one markups are not a feature of GP-led transactions.

Taken together, the Bernstein appearance didn’t rewrite the secondaries thesis Arougheti laid out a few weeks ago — it reinforced it with operational specifics. The doubling of Landmark’s profitability and AUM since acquisition. The explicit Q1 pipeline strength. The GP-led competitive moat. And a clear-eyed rebuttal of the day-one markup conversation that has been circulating across the industry.

The core argument remains the same: the secondaries market is under-capitalized relative to the demand it serves, volatility accelerates rather than suppresses deal flow, and Ares built its platform early enough and broadly enough to be a primary beneficiary of both trends.

Looking ahead, Ares is set to have more to say later this week. The firm has announced that Co-President Blair Jacobson will present at the Goldman Sachs European Financials Conference — and given everything Arougheti laid out on the secondaries opportunity, we will be listening closely for the European angle. With GP-led activity accelerating and the continent's secondaries market still maturing relative to the U.S., there is plenty of ground to cover.