Apollo’s Zelter Says Private Credit Concerns Are Just Growing Pains

Summary

• Defends the private credit asset class, framing current market concerns as "growing pains" analogous to the early skepticism of the high-yield (junk) bond market in the early 1990s.
• Argues the broader, more important story is the "public-private convergence," where portfolios increasingly blend public and private holdings, citing Berkshire Hathaway as a key example (half its portfolio in private companies).
• Believes fixation on specific vehicles like BDCs (Business Development Companies) misses the larger plot of robust US economic growth and a deepening, institutionalized financing environment.
• Attributes the strength of the US financial system to economic growth since 2009, a robust banking sector, and the proliferation of securitization and institutional capital pushing risk out of banks.
• Uses SpaceX as an illustrative case: while mutual funds may have inconsistent marking methodologies for such private holdings, that shouldn't deter investment in a "great American company."
• Implies a long-term, structural demand driver for private credit and yield products: global demographic trends creating a need for "robust compounding yield."
• Suggests media coverage focuses on sensational headlines rather than the methodical growth of the US economy and the evolution of its capital markets.