The Three Most Memorable Quotes From Earnings Season
The leading alternative asset managers have all reported Q3/2025 earnings, and sentiment across the board was upbeat. Private equity managers expressed confidence that market conditions are improving, making it easier to sell assets and convert holdings into cash earnings. There was also continued optimism about expanding into new areas of private markets, particularly those targeting individual investors.
Despite this positive outlook, managers remained focused on addressing recent negative headlines about private credit, which shaped much of the conversation. In that context, the following are the three most notable quotes from the quarter, in no particular order.
1. "To be honest with you, it's a little bit of a head scratcher because everything that we're seeing tells an opposite story."
This comment was made in response to an analyst’s question regarding “the credit cycle and the idiosyncratic instances of fraud” that surfaced with First Brands and Tricolor, a subject that I wrote about recently as well. Mr. Arougheti noted that credit trends among the largest banks and asset managers remain benign, and pointed out that firms like Ares intentionally avoid asset classes such as Trade Finance, where oversight challenges make fraud detection more difficult. He also pointed out that headline-grabbing fraud risks tend to be concentrated among smaller or less sophisticated market participants.
Such commentary was mirrored by Ares's peers. Blackstone, the first firm to report earnings, highlighted how "misunderstandings and misinformation" in the press have associated the First Brands and Tricolor collapses to broader issues in private credit, even though major firms are insulated from these events. Meanwhile Blue Owl’s leadership was unequivocal in stating that their funds have no exposure to either company and do not view these incidents as "canaries in the coal mine". KKR added on, quite simply, that "the noise is bad and the facts are good."
2. "Colm is just wrong."
This quote from Mr. Rowan was in response to comments by UBS Chairman Colm Kelleher at a Hong Kong event, where he warned that insurance companies are playing a dangerous game through their activities in private credit. Mr. Kelleher was particularly critical of the rating agency system, arguing that issuers often shop around for the most lenient ratings. He argued this dynamic encourages reliance on less transparent ratings and less credible agencies, resulting in increasingly risky assets accumulating on insurance company balance sheets, thus posing a threat to the financial system.
These concerns echo the experience of the 2008 financial crisis, where rating agencies (under commercial pressure) granted top ratings to mortgage-backed securities that ultimately proved worthless. Mr. Kelleher noted that smaller rating agencies today might face similar incentives to provide favorable grades to retain clients.
In contrast, Mr. Rowan defended the insurance industry's approach, citing Apollo's captive insurer Athene as an example. He pointed out that the vast majority of Athene’s assets carry ratings from both S&P and Moody’s, and that 90% of Athene’s balance sheet is investment grade, a considerably higher proportion than the banking system at 60%. Mr. Rowan also noted that almost all recent credit blowups have come from banks, and that "the deflection from banking to insurance is an easy deflection and something one says at a conference".
