Apollo Global Management Inc.’s Marc Rowan said it’s getting harder for active managers to beat indexes in public markets and that it is easier for investors to find alpha in private markets.
“Public markets are so correlated and indexed that if you actually want outperformance, you need to step away from public markets,” Apollo’s chief executive officer said in an interview on Bloomberg TV from the firm’s New York headquarters. “We are also revisiting the notion of public being safe and private being risky.”
Rowan’s comments match the firm’s pitch to investors, that private markets offer more attractive returns in exchange for some illiquidity. The pitch has been compelling in recent years, as the firm has more than tripled its assets under management since 2016. Apollo is one of the largest private alternative credit managers, with about $500 billion in credit assets.
Rowan said that figure is “not relevant” in the financial system compared with the big banks. The world is going through a “de-banking,” with growth coming from the investor marketplace as opposed to the banks, he said.
“With the exception of China, everywhere in the world regulators are favoring investors over banks,” Rowan said.
