“Here we are again,” reckons Kort Schnabel, co-head of US direct lending at Ares Management, on the surprising return of inflation. Still, the economy is in a good place to be able to manage through these inflationary pressures we’re seeing, Schnabel explains to Lisa Lee on the latest episode of Credit Exchange.

On artificial intelligence and disruption of software companies, Schnabel says we are “not out of the woods”. He adds, however, that there is some good news, in that “it’s not getting disrupted overnight.” Ares – an alternative asset manager with around $680 billion in AUM, and a private credit powerhouse – is open to lending to software firms, but the bar has risen higher, and he explains the factors.

Schnabel is now seeing, for the first time in many years, real dispersion in performance among different managers.

“I think you’re seeing the maturation of these portfolios, and you’re seeing the maturation of the portfolios that were ramped pretty quickly because there was a lot of money.”