Credit markets aren’t fully pricing in the impact the pandemic-related shutdown will have on small and medium-sized businesses, according to one of the sector’s biggest lenders.

“There is a little bit of a risk that people are underestimating the level of distress in the small business and consumer landscape absent the government support,” Michael Arougheti, chief executive officer at Ares Management Corp. said. “When you look at the government aid programs, they’ve generally been structured to get us through June and July, and after that is a big question mark.”

The U.S. government has doled out potentially forgivable loans under its Paycheck Protection Program, touted as a Covid-19 lifeline for firms with fewer than 500 workers, while the Federal Reserve’s Main Street Lending Program would provide as much as $600 billion to help save swaths of mid-size U.S. businesses and jobs.

Strains will show in repayment rates on company and consumer loans, rent and mortgages, according to Arougheti. More broadly, the economic recovery is going to be longer and more uneven than many expect, the CEO said, speaking at the Morgan Stanley Virtual U.S. Financials Conference on Tuesday. That’s not being reflected in credit markets, which are on their best rally in decades.

“When you take a step back and think about what’s happening in the real economy, it doesn’t really compute,” said Arougheti. “There’s a massive disconnect between the liquid markets and the real economy.”

Ares, which entered the Covid-19 crisis with roughly $33 billion of dry powder, has been most active in providing rescue funding across its strategies, including alternative credit, according to Arougheti.

The firm’s portfolio companies have received capital injections from equity owners to support business, he said. Within its credit holdings, Ares has been able to negotiate stronger covenants and higher loan prices. The firm is “cautiously optimistic” of receiving debt payments in June, he said.

The firm also expects to grow fee-related earnings during this year by at least 15%, Chief Operating Officer Michael McFerran said during the virtual conference.