May 27, 2026 · 55m · a16z
Private Markets, Software Repricing and Capital Allocation | Marc Rowan on a16z
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On The a16z Show, Apollo Global Management CEO Marc Rowan joins David Haber to explore the structural shift toward private markets, the massive private credit needs of AI infrastructure, and key approaches to corporate governance and organizational culture.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 4.4 Guest teaching 4.5 Guest disagreement 1.0 The host pushing back 0.6
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 33:24 Rowan attacks legacy software PE valuations
Rowan forcefully rejects traditional private equity's reliance on software buyouts, calling out fund managers for ignoring AI disruption and forecasting disastrous returns for in-the-ground PE funds.
Hardest push from the host ▶ 33:06 Host challenges guest on enterprise software risksDavid Haber explicitly presses Rowan on his prior warnings regarding direct lending overexposure in enterprise software, forcing Rowan to justify his alarmist take on the sector.
Biggest teaching moment ▶ 13:26 Rowan reframes asset management evaluation metricsRowan corrects the common industry belief that AUM is the best measure of success for alternative firms, educating the host on why origination capacity and excess spread creation are the true bottlenecks.
The host holds their own ▶ 12:58 Host demonstrates deep grasp of Rowan's spread modelDavid Haber demonstrates host expertise by accurately recalling and summarizing Rowan's precise financial framework on liability costs and marginal risk spreads from a private dinner conversation.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Title Card: The a16z Show | 3 | 3 | 1 | 0 | Host David Haber opens with a friendly inquiry into Marc Rowan's background at Drexel and the firm's alumni network. Rowan explains how analyzing distressed corporate fundamentals forced clean-sheet thinking over standard financial engineering. | |
| Mentorship with Michael Milken: Urgency, Synthesis, and Adapting to Change | 2 | 4 | 0 | 0 | Rowan shares stories about Michael Milken's relentless questioning and recounts Apollo's founding amid the 1990 recession. The host largely listens and reacts warmly to Rowan's narrative. | |
| Transforming Apollo into an Asset Management and Retirement Powerhouse | 4 | 4 | 1 | 0 | Haber correctly points out that Apollo is often mischaracterized as purely a private equity firm. Rowan details Apollo's true AUM breakdown, emphasizing that 80% is investment grade credit linked to retirement services. | |
| Public Market Concentration vs. Private Market Opportunity | 6 | 3 | 0 | 1 | Haber demonstrates strong technical context by recalling Rowan's dinner remarks regarding liability costs and risk spreads. Rowan validates the host's framing and expands on capital alignment. | |
| Origination as the Core Bottleneck and Capital Alignment | 4 | 5 | 1 | 1 | Rowan reframes standard industry metrics, arguing that asset managers in private markets should be evaluated by origination capacity rather than simple AUM growth. Haber accepts this frame and transitions into market structure. | |
| Democratization and Daily Liquidity in Private Markets | 5 | 4 | 1 | 1 | Haber brings up Apollo's recent announcement on daily estimated valuations for credit products. Rowan explains how alternative asset managers must adapt to institutional and wealth channels rather than expecting buyers to fit legacy drawdown fund models. | |
| The Strategic Role of Private Credit in Corporate Finance | 5 | 6 | 2 | 1 | Haber prompts Rowan to address the narrow media definition of private credit as just direct lending or BDCs. Rowan explains the distinction between credit risk mindset and equity risk mindset, detailing corporate IG borrower trends. | |
| The Intersection of Venture Capital and Private Credit in AI | 5 | 5 | 0 | 0 | Haber articulates a thesis around tech becoming capital-intensive and needing non-dilutive credit solutions. Rowan agrees strongly and breaks down hybrid capital buckets and AI infrastructure financing. | |
| Macro Trends: Capex Concentration and Workforce Shifts | 4 | 5 | 0 | 0 | Rowan discusses macroeconomic workforce shifts where GDP grows while job count stays flat or declines due to AI. Haber concurs with Rowan's perspective on bridging Wall Street and Silicon Valley mindsets. | |
| Guidance for Tech Entrepreneurs Engaging with Alternative Capital | 3 | 4 | 0 | 0 | Haber asks how tech founders should think about partnering with alt capital firms like Apollo. Rowan outlines early-stage strategic partnerships and interim liquidity solutions. | |
| Enterprise Software Repricing and the AI Disruption | 6 | 6 | 4 | 2 | Haber raises Rowan's past public warnings regarding enterprise software repricing and direct lending risks. Rowan delivers a forceful critique of legacy PE software valuations, predicting disastrous returns for existing software buyouts. | |
| Lending Through Cycles of Technological Disruption | 5 | 5 | 3 | 2 | Haber transitions the conversation to moral leadership and Rowan's high-profile actions regarding UPenn's administration. Rowan aggressively critiques institutional cowardice and ideological orthodoxy while defending merit-based hiring. | |
| Preserving Culture at Scale: Playing to Win and Normalizing Failure | 5 | 4 | 0 | 0 | Haber asks how Apollo preserves its culture as it scales past a trillion dollars. Rowan describes normalizing failure through a Wall of Shame and replacing fear of losing with clean-sheet problem solving. |
Statements from this episode (31)
Rowan: Financial firms die from funding risk or bad assets
“Financial services firms die from one of two causes. Heart attacks or cancer. Heart attack is funding risk. If you lend long and borrow short, you have funding risk.”
Rowan: Apollo Global Management manages over $1 trillion in assets
“The firm today is a little bit over a trillion dollars in assets under management, which is just a measure.”
Rowan: Credit makes up 80% of Apollo's assets, private equity only 10%
“80% of the assets under management are credit, and the vast majority of that is investment grade. And the other two hundred billion, or 20% of it, half of it is what we call hybrid equity, partner-like equity, and half of it is traditional private equity in a …”
Rowan: Investment firms cannot scale without serving a fundamental societal good
“When you are a small firm, you can be a good deal shop. But when you want to get large, you have to serve a fundamental good, otherwise the societal pressure, the government regulation, the forces around you constrain you.”
Rowan: Top 10 stocks account for nearly 50% of S&P 500
“10 stocks right now in the US are nearly 50% of the S&P, and they're all levered to the same trend.”
Rowan: Five banks and five tech firms will dominate fixed income
“And so the same thing, by the way, is happening in the global fixed income market dominated historically by 10 large banks. It's about to be dominated by five large banks and five large tech companies. As much concentration as exists in the equity market, That…”
Rowan: Private markets are the only remaining source of investor diversification
“And so if you're an investor and you're looking for diversification, there's no place to get it other than private markets.”
Rowan: Industrial companies will stay private longer
“We, we're gonna see the same thing happen with industrial companies. Lots of industrial companies are just gonna decide to stay private longer for all the reasons we know.”
Rowan: Alternative asset managers are limited by origination capacity, not capital
“We are not limited ultimately by capital. We are limited by our capacity to create.”
Rowan: Apollo investment grade private products will offer daily pricing by June
“And so, we're starting with our investment grade private suite of products, and we will be daily estimated value by June 30.”
Rowan: Apollo will expand daily valuations across entire credit business by September
“This is about creating an ecosystem, and by the end of September, this will be across the entirety of our credit business.”
Rowan: Transparency and price discovery expand market size tenfold
“I've never seen a market in the world where you have transparency and price discovery that is not 10 times its size.”
Rowan: Credit management demands total risk aversion unlike equity investing
“In credit, you only get your principal and interest. You should not be around risk taking. As a rule, you should be fully diversified. In the equity business, you actually get paid for risk taking.”
Rowan: Tech and industrial giants dominate private investment grade issuance
“But if you think of the largest issuers of private investment grade, it's Intel, it's Air France, it's EDF, it's AT&T, it's Meta, it's BP Energy, and so on, and you're hearing lots of public companies.”
Rowan: Banks are built for short-term debt, not long-term financing
“The bank market is the best source of financing on a short-term basis anywhere in the world. A bank borrows short deposits and lends short. A bank is the best short-term lender. It is not a good long-term lender.”
Marc Rowan: Hybrid capital is Apollo's fastest-growing business
“We call that hybrid for us. That's our fastest growing business.”
Marc Rowan: Data centers and chip financing drive Apollo's business
“So if I look at the drivers of our business for this year, it is data centers. It is massive amounts of chip financing.”
Marc Rowan predicts credit spreads will widen from AI concentration
“I think spreads are gonna widen.”
Rowan: Apollo is committed to establishing a second headquarters
“But we are committed to a second headquarters. We want access to a second talent pool.”
Rowan: Apollo assumes AI will replace or enhance every job
“We operate under the assumption that every job is going to be replaced or enhanced.”
Marc Rowan predicts a surge in tech growth and finance partnerships
“The number of partnerships I believe that are going to Sprout up, whether it is the open AI ecosystem that they're building to be able to democratize their LLM, or is the anthropic ecosystem that is being built to democratize their way of doing things. I think…”
Rowan: 30% of private equity capital went to enterprise software last decade
“30% of the private equity industry over the past decade has been devoted to enterprise software.”
Marc Rowan predicts disastrous returns for private equity enterprise software deals
“I personally expect the returns from private equity in the ground to be disastrous. Because so much of exposure is to enterprise software, and this does not mean that enterprise software companies are going out of business. Far from it. It means that the prosp…”
Marc Rowan predicts blue-collar ascendancy and white-collar decline from AI
“What I've said previously is I think we're going to see a little bit of blue collar ascendancy and white collar decline.”
Marc Rowan: Lenders cannot make credit decisions on 20- to 30-year horizons
“As a lender, you know this. You are diversified. You are senior where you perceive risk. You look for a hard collateral. And you accept that you can't make a decision for 20 or 30 years. You can make a decision for three or five or seven years in what we're do…”
Rowan: University protests are fundamentally anti-American and anti-system
“Israel, Palestine is not fully an anti-Semitic issue. And that's not what I saw at these universities. I saw it as an anti-American, anti-system issue.”
Rowan: Vast majority of UPenn donors reduced annual donations to $1
“Vast majority of donors decided to give the university a dollar per year versus whatever their donation was.”
Rowan: Apollo hires based on individual merit and distance traveled
“We've stuck with the same formula. We hire for merit. Adjusted for distance traveled. And distance traveled is not about your immutable characteristics. It is about you as an individual, not your class, not your group.”
Rowan: Apollo's climate investment policy permits financing hydrocarbons
“We're gonna make it better, not worse, but if that includes financing hydrocarbons, we're gonna finance hydrocarbons.”