Rowan notes major innovation companies like SpaceX, OpenAI, and Stripe all remain private despite US capital market strength.
“But I'll go through the companies who are creating massive change. SpaceX, Anthropic, OpenAI, Stripe, Cursor, Cognition, Andoril. What do all of them have in common?”
Rowan says private market capital enables companies to invest long-term without quarterly pressure or accessing public markets.
“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.”
Rowan challenges the perception that public markets are safe and private markets risky.
“We have a perception that what's public is safe and what's private is risky. But what if we're wrong?”
Rowan claims Apollo's private markets plus guaranteed income offering is 60% better, not just 5-10% better.
“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.”
Rowan states public companies halved to 4,000 while 80% of large companies are now private.
“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.”
Rowan argues retirement systems know their liquidity needs for ten years and should get paid for illiquidity.
“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.”
Barron's
“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.”
Rowan reframes public versus private markets as fundamentally about liquidity rather than risk.
“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.”