Ares CEO says it should probably be bigger in private equity

NEW YORK, July 31 (Reuters) - Ares CEO Michael Arougheti said on Friday it should probably be bigger in private equity, after a report that the group, a leader in private credit, had held talks to buy a smaller firm.

Arougheti told the Financial Times in December that Ares could look to acquire a large private equity group, in part because the buyout business would be one beneficiary of a drive to include more private assets in mainstream retirement plans.

The FT reported this week that Ares, which manages $671 billion, had held talks to acquire Leonard Green & Partners, which manages $85 billion. Ares declined to comment on the report at the time.

Asked about the FT report on an analyst call, Arougheti said any deal would need to have cultural and strategic benefits, and make the business better in areas including revenue.

"The question that we have posed ... is as Ares continues to scale the way that it is, should we be bigger in private equity? And I think the answer is probably, if we check all those three boxes," Arougheti added.

"There's a lot to argue in favor of it, but ... the price has to be right," said Arougheti. "I think the industrial logic would make a lot of sense for the right ... situation," he said.