Apollo Co-President Scott Kleinman discusses the firm's strategic evolution following the 2008 Global Financial Crisis.
Prediction Not checkable as stated
Kleinman: Semi-liquid PE will fail to deliver a good client experience
“It's not going to give the client, i.e. The wealth client, a good experience in the long run.”
Insight
Kleinman: Asset management growth is constrained by origination, not capital
“The whole industry thinks in terms of capital formation. I just got to raise more capital and I'll deploy it. We flipped that on its head and said, no, the limiter of our growth is not capital. We've never had a situation where we've had good ideas and haven't…”
Prediction Not checkable as stated
Kleinman: Asset management will stop segmenting by public versus private in 5-10 years
“And the way you cut the asset management industry in five or 10 years, I'm not sure is going to be based on public and private. It'll be based on other risk categories, but that's not a good definition of what's risky and what's not risky anymore. I think you'…”
Disclosure
Kleinman: Apollo Holds Lower Leverage and Fewer PIK Loans Than Competitors
“Our private equity portfolio is more defensive than most of our competitors. Our credit portfolio is for sure much higher rated, much less leverage, much less portfolio leverage. Our private lending portfolio has a fraction of the pick loans or other aggressiv…”
Insight
Kleinman: Private equity cannot scale like credit due to concentrated dealmaking
“There's only so much you can deploy in private equity. When you are making six or eight consequential decisions a year, there's only so much capital you can deploy on that basis. In the credit business, instead of buying a hundred million of this particular bo…”
Prediction Not checkable as stated
Kleinman: Weak AI ROIs will weigh on markets and hit levered players
“If those ROIs don't come to pass, I don't think the whole system is going bankrupt, but that clearly will have a weighing effect on the markets. Certainly the biggest hyperscalers will be okay, but that cascades down to many, many players, some of whom have go…”