Marc Rowan is a founder and the current CEO of Apollo Global Management (APO). APO manages over $500 bil in the alternative investing space- clearly, Marc Rowan has a handle on capital markets.
During Apollo’s 3Q23 earnings call, Marc drew on his 39-year career and made several intriguing observations about capital markets.
First, he identifies four major tailwinds to recent performance:
“It does not surprise me with those four tailwinds that risk assets (equities growth, real estate, things like that) did really well. But I ask myself, are any of those four things true today?”
“Looking backward is not likely to be a good indication of what needs to be done going forward for investing success.”
“In 2008, we came very close to an absolute debacle in our financial system. And the rules of how our financial markets work were fundamentally rewritten. We, not just Apollo, but all of us, we just didn’t notice, because right after we changed the rules we printed $8 trillion and everything went up and to the right. Well now that we are no longer doing that, now that rates are up, now that there are headwinds, we are starting to notice some of these changes.”
“We had this perception historically that public was safe and private was risky. I ask, is that even the right framework to think about how market structure is today?”
As Marc points out, public markets are losing some of their ‘edge’ over private markets.
Going forward, alternatives will play a larger role, not just in client portfolios, but in the entire economy. As this develops, many financial firms will rush to exploit this opportunity- most of them will make (dumb) mistakes.
The best positioned firms are those like Cobblestone, who spent the last decade laying the groundwork and building up institutional knowledge.