Marc Rowan

“I would say that private credit levered lending, direct lending, has actually been a de risking for the entire United States and for investors.”

“no one sold their treasuries or their investment grade bonds to buy private credit. Investors sold their equities.”

“And so for us, $750,000,000 in the first quarter, dollars $750,000,000 out in the first quarter, this is not of any moment.”

“we're seeing, this technology shift take place at a point in time when the private equity industry spent a decade where 30% of their activity was enterprise software. That to me is the story.”

“Money is coming in institutionally, and it is going to result in reasonably normal spreads for the except with the exception of software, which has nothing to do with public or private.”

“But now as we've been saying, it's only 70% of what you need to worry about. The other 30% is geopolitics. It's government borrowing. It's excesses in capital markets and it's technological change.”

“But apparently two weeks ago we discovered that AI is going to impact software and we've been in a massive risk off mode and so software stocks are down almost 70%.”

“S, they want to do in Europe and they're not as well prepared to it and they're doing it in The Middle East and they're doing it elsewhere around the world.”

“I think it's in the best shape I've ever seen it in my forty two years of professional career.”

“The vast majority of the private market is investment grade. There's a $40,000,000,000,000 market and 99% of the headlines are focused on a little slice of a trillion and 0.5 called levered lending.”

“So if you think last year, we originated a little over $300,000,000,000 of new investments, mostly credit. 80% of that was investment grade. I assure you no one is complaining about the lack of buccaneering.”

“But if you look around the world, every place that private assets have been added to public portfolios, you've gotten better outcomes.”

“That felt really good on the way up. That's not going to feel so good on the way down.”

“And there are companies of which we are one, but not the only one who went all first lien, who went almost all cash pay, who went large companies, who work with low leverage.”

“If 30% of your portfolio is in one industry and that one industry is being impacted by technology, you have not been a good risk manager.”

“I mean, we were the whole, the entirety of the companies that you see that are public today, everyone was 40,000,000,000 in 2008. We're now close to a trillion Blackstone more KKR, a little less.”

“I think the 30% overhang of geopolitics, inflation, technological change is now here. It was foreseeable, not maybe exactly how it occurred, but it was foreseeable. It was predictable.”

“If you were a good risk manager, you are going to make more money this year and next year if it continues than you ever have before because you've been risk off.”

“But now, as we've been saying, it's only 70% of what you need to worry about. The other 30% is geopolitics, it's government borrowing, it's excesses in capital markets, and it's technological change.”

“But apparently two weeks ago, we discovered that AI is going to impact software and we've been in a massive risk off mode. And so software stocks are down almost 70%.”

“S, they want to do in Europe, and they're not as well prepared to it, and they're doing it in The Middle East, and they're doing it elsewhere around the world.”

“The vast majority of the private market is investment grade. There's a $40,000,000,000,000 market, and 99% of the headlines are focused on a little slice of a trillion and 0.5 called levered lending.”

“So if you think last year, we originated a little over $300,000,000,000 of new investments, mostly credit. 80% of that was investment grade. I assure you, no one is complaining about the lack of buccaneering.”

“And if you go to the extreme and you take retirees, for instance, in four zero one k, an extra percent compounded over the duration of how long you're going to be in there is a 50% to 100% better outcome by having better investments.”

“We have 10 companies that dominate the S and P. We've essentially, as I sometimes joke, we've levered the entirety of the retirement system of The U. S. To NVIDIA.”

“I predict that individuals will be at least as big as institutions in their alternative bucket.”

“The disconnect in people's minds of private and investment grade is actually funny to watch sometimes, because we've grown up with forty years of thinking that private is risky and public is safe.”

“What if private is safe and risky, and public is safe and risky, and we're talking about differing degrees of liquidity in different markets? I think that's what we're seeing.”

“In fact, what's happened is the democratization of private credit has made our system more resilient. Rather than credit being concentrated in a handful of banks, it's now throughout the investment marketplace.”

“Most active managers have failed to beat the index 90% of the time for twenty years. I don't think it's a result of lack of effort or intelligence.”

“Our role is to originate the assets. If we originate good risk that offers excess return per unit of risk, we will prosper, and we will have lots of buyers for our product, our own balance sheet, funds, individuals, institutions, insurance companies, four zero one ks, and so on.”

“We have governments around the world who are borrowing record amounts of money. We are, for maybe good and valid reasons, fractionalizing our labor supply through immigration reform.”

“Depreciating our currency has the tendency to be inflationary. And what we're seeing is a steepening of the yield curve. Rates that matter, the ten year, are higher even if short rates are lower.”

“And the reality is most private credit is investment grade, And most of the credit in the financial system that is private, banks, insurers, pension funds, is investment grade.”

“We don't think anything of Nvidia or the S and P going up or down 10 or 15%, and yet one private credit loan or one broadly syndicated loan defaults and people lose their mind.”

“The fact is if experts looking out not all that far have no idea, we are making a fundamental bet on equity.”

“They have massive amounts of cash flow coming from lots of other businesses. And if I am worried about the debt of hyperscalers, the economy and The US have way bigger issues.”

“We have governments around the world who are borrowing record amounts of money. We are, for maybe good and valid reasons, fractionalizing our labor supply through immigration reform.”

“And what we're seeing is a steepening of the yield curve. Rates that matter, the ten year, are higher even if short rates are lower.”

“In much of the financial press, private credit means levered lending, a below investment grade deal related activity.”

“We don't think anything of Nvidia or the S and P going up or down 10 or 15%, and yet one private credit loan or one broadly syndicated loan defaults and people lose their mind.”

“Generally, what investors are doing is they're taking money out of equity or out of high yield bonds and moving into levered lending. It's roughly the same return, and it is less volatile.”

“And each of the good and the great consulting firms have weighed in, and it looks like a child scattered dark plot.”

“But I don't think it is a foregone conclusion that because you own a data center and you own equity in it and data is valuable that you will make money in data center equity.”

“Twenty five years ago, the notion that levered loans would trade was a fantasy. How could they trade? Every loan was different.”

“Twenty five years later, levered loans trade because this one bank made a market in it, and then other banks came and made a market in it.”

“And lo and behold, we take for granted that the broadly syndicated market trades. We have ETFs. We have open end mutual funds. We have a series of products.”

“We don't think of them as private anymore. This notion of what's public and what's private, I think, is in transition.”

“I think what we're seeing is the availability of capital in private markets is allowing companies to do a series of things, to invest for the long term, not to be driven by quarterly earnings, and to obtain massive amounts of debt and equity to finance their business plan without accessing public markets.”

“And it is not just AI companies. The defense companies of the future, they're also still private in many instances.”

“It will not surprise me to have large manufacturing consumer companies that are private in the future.”

“I think we're heading to a world where we not just have private credit, but we have equity that is private, not just private equity.”

“It will not surprise me that we end up with an S and P 500 index and an index of companies that are private.”

“Forty years ago, private was three products, Private equity, venture capital, and hedge funds. All can be good investments, but all have risk. And public were 8,000 public companies, diversified portfolios of stocks and bonds.”

“It, along with its European affiliate, are now more than $400,000,000,000 of assets under management. We grow on a gross basis more than $70,000,000,000 a year.”

“We are in fact the largest provider of retirement services products to The U. S. Market by a long shot.”

“Do I think we will have a recession associated with large increases on unemployment? No, I don't. Remember, we're starting from a position of strength. We're starting from 4% unemployment.”

“We had one stock which was larger than the market cap of every stock exchange in the world other than Japan. That was not necessarily fundamentals. That was money flow.”

“The reality is The U. S. Is the best market in town. We are still 60% of the world's capital flow. We will be for a very long time.”

“We likely will cause two quarters of negative growth if we, in fact, don't resolve the uncertainty. So until we have resolution of what the rules of the game are, it's gonna be slow.”

“US and Mexico together should be the driving economic force in the world for the next fifty years.”

“Longer term, the way we've done this, we have done damage to The US brand. The brand for stability, for predictability, for regularity. That will eventually have some cost to us.”

“What I've said is I see us moving from what was hyperexceptionalism to merely exceptional because I don't think there are good alternatives to The US today, but that can change over time.”

“I do not believe prices are low. They are lower, but we're still talking about an average PE as a reference in the mid twenties versus 16 over time.”

“We have a perception that what's public is safe and what's private is risky. But what if we're wrong?”

“Takes five days today to sell an investment grade corporate bond. We should expect in every risk off moment public credit to trade poorly.”

“The US is the second freest trading market in the world financially after Japan and is the freest trading market in the world considering non tariff barriers. Why is that written in stone?”

“The one I worry about more is the second, which is damage to The US brand. What does our brand mean when it comes to long term agreements, long term security packs?”

“The US and Mexico should be positioned to dominate the economic landscape for the next fifty years. US advanced manufacturing, Mexico the workshop, and so on and so on.”

“One of the leading families said to me, if it takes tariffs to make Mexico great again, so be it. Imagine an administration that stood up”

“Those people who are tied to asset prices who thought we were had a God given right that everything move up at 11% annually are disappointed.”

“That's not a gamble I would have taken from the position we had. Having said that, short term uncertainty, that's the risk. Longer term brand, that's the risk,”

“give us an a as an economy for allocation of capital and construction of assets, and give us a c for understanding trade and its impact on labor.”

“we are not going to make sneakers in The US. We have 4% unemployment. We're building all these other things.”

“To the extent we do not want massive amounts of immigration, we are not going to be the low cost manufacturing center for low value goods.”

“I went, door to door in the Senate for a piece of legislation called the Antisemitism Awareness Act, which defined antisemitism as anti Zionism in in shorthand.”

“We afforded them lack of judgment of any action they had done based on their aggrieved status. And this became institutionalized in our universities.”

“In admissions and in faculty hiring, no consideration of race, ethnicity, gender, sexual orientation, political viewpoint, religious viewpoint, otherwise. Merit. That does not mean you cannot hire the best basketball team.”

“There's mostly alpha, but there's a chunk of beta in there. For us to double that business, it's finding 300,000,000,000 of assets or 350,000,000,000 of assets over the next five years.”

“Everywhere in the world as I suggested, regulators have two choices as to where debt capital comes from, the banking system or the investor marketplace. Everywhere they've told the banks to do less.”

“if I'm right and we're right that public and private are going to converge to some extent, illiquidity premium, structuring premium, they're going to disappear.”

“we have 12 to $13,000,000,000,000 in 04/2001 and we're forcing these really long term investors to own daily liquid index funds for a period of time, fifty years.”

“That will not just benefit Apollo, that will be another source of demand for the industry of a magnitude that will be quite substantial.”

“the outcome that we can offer with access to private markets and guaranteed income is not 5% better or 10% better, it's 60% better.”

“A $100,000,000,000 later we're still doing investment grade private deals. And I I see nothing but a long line of interesting borrowers and interesting situations”

“Eighteen months from now, I do not believe investors will actually know the difference between investment grade public and investment grade private.”

“What do they own. They own daily liquid stock index funds generally S and P for fifty years.”

“The returns have been nothing short of spectacular. Outcomes for investors can be not a little better 5060% better.”

“A bank is levered 12 to 14 times. The typical institutional investor is levered zero. The typical mutual fund levered zero. Typical BDC levered 1.5 times. Typical retirement services company levered eight times.”

“The direct the notion that we are spending 2,000,000,000,000 in excess of what we take in in peacetime with full employment does not bode well for the availability of capital to do what we need to do”

“The notion that we would cut rates. Financial markets are wide open. Equities are at all time high. Financing is available. Real estate prices are going up”

“By recent measures, it would take you five days to sell an investment grade public corporate bond today because there is no liquidity.”

“I will predict that a year from now, you will not be able to tell the difference between public and private.”

“I believe excess return comes from origination. The capacity of an investor, someone like us, and we're not the only ones who do this, who can go out and work with a company and solve their unique issues and make the commitment and structure and take the whole thing down and originate a credit.”

“And for us, we are very focused on scaling origination. We've spent nearly $8,000,000,000. We have 4,000 people who wake up every day, and all they do is origination.”

“Athene does not want a 100% of anything that we originate. They wanna be a diversified investor. They want 25% of everything and a 100% of nothing.”

“We're just finding out, for instance, that there's no liquidity in fixed income markets. That trading capital in the world is 10% today of what it was in 2008.”

“we've had a soft landing. When rates have gone up 400 basis points and the wheels haven't come off the bus, as they say, I think that's the definition of a soft landing.”

“Here are people who have spent their whole lives becoming good investors, and they as an industry have failed to beat the market 93% of the time for twenty years.”

“We now have 4,000 public companies. People think most of the action is in public markets. 80% of companies over 100,000,000 of revenue and 80% of employment is in private companies.”

“What are these people invested in? They don't know. Well, I'll tell you, on the whole, they're invested in daily liquid mutual funds and ETFs for fifty years.”

“Are they antiamerican? They are antiamerican. They're actually anti western. We have we're thought of as these protests are leftists. I used to think of the left as liberal. Now the left is illiberal.”

“A 100% of our returns this year are from 10 stocks which constitute 35% of the S and P that traded an average PE of 50.”

“If you look at the active management, active management has failed to beat the index 85% of the time for twenty years.”

“Single best year in Apollo's history. Earnings. Asset performance. The our platform as you think about it we are around 650,000,000,000 of assets under management in our asset management business.”

“And regulators have only two choices as to where credit comes from. It can come from the banking system or it can come from the investment marketplace.”

“But if you look at the trend with the exception of China everywhere in the world regulators are favoring investors over banks.”

“I think the worst thing that can happen to these universities is apathy. Right now there's not apathy. Donors are engaged. They want change.”

“Think about it. People want to come here. We have an incredible knowledge base. We have abundant energy. We're leaders in technology. We have a massive domestic market. We're the strongest military power.”

“A 100% of our returns this year are from 10 stocks which constitute 35% of the S and P that traded an average PE of 50.”

“Liquidity liquidity is a risk to everyone but in differing degrees. So if you are a retirement plan or a retirement system, you know your liquidity requirements for the next ten years.”

“If you look at the active management, active management has failed to beat the index 85% of the time for twenty years.”

“There is no daily liquid, quarterly liquid money at Apollo. We are ideally situated to take advantage of less liquid assets. We've structured ourselves that way.”

“Single best year in Apollo's history. Earnings. Asset performance. The our platform as you think about it we are around 650,000,000,000 of assets under management in our asset management business. 500,000,000,000 of that is credit.”

“And regulators have only two choices as to where credit comes from. It can come from the banking system or it can come from the investment marketplace. There's no third choice.”

“But if you look at the trend with the exception of China everywhere in the world regulators are favoring investors over banks. That does not mean we're gonna see a sunshift.”

“You know, imagine telling a group of firefighters a week after nine eleven that you're sorry for their loss, and then adding the word but as if you're going to explain the action of the terrorist.”

“In the background, there are three trustees and one chairman in my instance who are being asked to step off the board, all of whom signed this open letter, disagreeing with what the university is doing, and all four of us Jewish.”

“We already have seen a 150,000,000 that would have come to the university move away from the university.”

“We've seen more than 4,000 of our most engaged alumni basically say the university is heading in the wrong direction.”

“This is not president McGill didn't create this problem. The question is, is she the right person to manage this problem?”

“Apollo Asset Management ended the year roughly $550,000,000,000 $400,000,000,000 of private credit, mostly investment grade, dollars 75,000,000,000 of hybrid equity, 75,000,000,000 of private equity.”

“So in 2008, we started with a $16,000,000 equity investment. We ended the year at 330,000,000,000 and have become the largest provider of retirement products in The US.”

“2022 was a good opportunity for us to realize that public can be both safe and risky, and private can be both safe and risky. The only difference is a degree of liquidity.”

“Twenty years ago, there was alpha left in publicly traded fixed income markets. Firms like ours offered you a high yield bond account, a levered loan account.”

“If you can earn single A corporate bond rates plus 300 for being less liquid for ninety or one hundred and eighty days, it seems like a pretty good trade.”

“Four years ago, we were 20,000,000,000 of new sales, then 30,000,000,000, then 47,000,000,000. This year, we'll do north of $60,000,000,000 of new sales, and it continues to be.”

“Everything that was purchased prior to 2022 is today worth less. The change in cap rates, the change in interest rates has simply made the market worth less.”

“42,000,000,000 left SVB in four hours without a line. So you're now the CEO of a big regional bank. Your cost of funds is up.”

“I'll be shocked if five years from now the business model of a regional bank looks like what they do today.”

“We now know public can be risky as well. We now have found out that private can be both safe and risky. What we're talking about is differing degrees of liquidity.”

“I think retail investors high net worth are gonna be 50% allocated to alternatives in the next five years. Now 50.”

“At 400,000,000,000 of private credit, mostly investment grade, unfortunately, we're not relevant. It sounds like a lot, 400,000,000,000, but we're talking about a $40,000,000,000,000 market.”

“Equity we printed $8,000,000,000,000 from 2008 until 2022. Exactly what was supposed to happen happened. Now that we've started withdrawing it, entry point for credit is fabulous, has adjusted very quickly.”

“The upside from simply executing the business plan that's in front of us is so high that the price of distraction is just very hard to contemplate.”

“What we didn't know is that 42,000,000,000 could leave the banking system in four hours without a line.”

“If you pay more for your deposits, if you have increased costs from operations, from regulation, and all of a sudden you don't know about the stickiness of your deposits, are you in the loan business anymore?”

“Amazing amount of money flowing into retirement services, particularly annuities. I would say the golden age of annuities,”

“They prefer 5% to 2%. It's no more we can make it really complicated, but when they're they've had a decade of very low ability to provide for retirement income, all of a sudden, can lock in 5% plus tax free for the next decade.”

“Our entire industry was 40,000,000,000 of AUM. Every one of the companies plus minus in 2008. We ended the year at 550,000,000,000.”

“We went for the private investment grade market. That is the dominant franchise we have built. What we're seeing right now, particularly the turbulence in banking, these are the kind of assets we compete for.”

“If you look at the now thirty two year history, 36% gross 26% net returns every fund has made carry.”

“And what started out as a $16,000,000 equity investment has now morphed into 270,000,000,000 of AUM and the largest retirement services company in”

“Think about what that does from an alignment point of view. We go to a client and we offer them nothing that we don't already own.”

“The banking system is 25% of all corporate capital. In Europe it's 65%. In Asia I think it's 90%.”

“I often say you can take equity risk. You can take credit risk. The risk these institutions should always get paid for is liquidity risk.”

“You're getting downside protection because the world is uncertain from a geopolitical and an economic point of view. You have enough equity upside that you should have pretty good returns.”

“And if you could earn 150 to 200 basis points more in origination at a very safe near investment grade level, that's a business we want to build.”

“And the ability to get it to $607,100,000,000,000, it sounds massive, but in the context of the markets in which they participate, it's just not all that big.”

“And what we've told the Street is we will grow our business 15% plus cash on cash year over year, and I think that's really good.”

“And in that fund, which was the 2,001 fund, 44% net returns. So, now you fast forward and you look at the last three funds we've done.”

“44% gross on the $25,000,000,000 fund, high 20s net. The world just keeps moving. The world just keeps changing. It's our job to continue to reinvent ways to extract and to produce value.”

“This thing called hybrid, which is $30,000,000,000 is actually really interesting because it is neither yield nor opportunistic. It is never going be the highest rate of return.”

“That's a $30,000,000,000 business. I think that business will be two and a half to three times its size in the next five years.”

“We are in, as I sometimes say, the fixed income replacement business. We're $330,000,000,000 today. Five years from now, that'll be twice its size.”

“I like to say it's the pile of assets in the world that yields less than 5% is like this big.”

“And what we've told the street is we will grow our business 15 plus cash on cash year over year. And I think that's really good.”

“And in that fund, which was the two thousand and one fund, 44% net returns. So now you fast forward and you look at the last three funds we've done.”

“This thing called hybrid, which is 30,000,000,000, is actually really interesting because it is neither yield nor opportunistic. It is never going to be the highest rate of return.”

“That's a $30,000,000,000 business. I think that business will be two and a half to three times its size in the next five years.”

“I've told our internal team our business is gonna change more in the next five years than it's changed in the past.”

“UJA has allocated more than $55,000,000 in response to the pandemic, feeding families, helping people find employment, sustaining the Jewish community's core institutions, providing dignified Jewish burials and so much more.”

“He said, good leaders create followers, great leaders create more leaders. That is what I see looking at all of you.”

“We need to go forward to extraordinary, not back to normal. Let us take not only what we can carry, but what will carry us.”