Apollo Global Management CEO Marc Rowan: Investors actually don’t know what they own

Summary

Apollo CEO Marc Rowan discusses the private credit market, arguing that it has de-risked the financial system and that current media fears are misplaced. He highlights that the real risk is concentration in enterprise software, which is vulnerable to AI disruption. He emphasizes that the issue is industry-specific, not asset class-specific.

• Rowan explains the $40 trillion private credit market and distinguishes it from the $2 trillion levered lending segment.
• He argues that private credit has moved risky activities out of the banking system, de-risking the US economy.
• Investors derisked by selling equities to buy first lien debt for equity-like returns.
• He downplays redemption concerns for Apollo, stating they are minimal.
• He warns that enterprise software is at risk due to AI technological change.
• The private equity industry's concentration in enterprise software is problematic.
• Spreads in private credit are widening slightly, except for software, attracting institutional money.
• The key takeaway is that investors should focus on business selection, not asset class labels.