Marc Rowan, CEO of Apollo Global Management Inc. (APO, Financial), expressed skepticism over the necessity of further interest rate cuts by the Federal Reserve. He noted the ongoing activity in financing and rising real estate prices as indicators of economic health. Rowan's comments follow the Fed's recent 50 basis point rate cut, the first in four years, and were made during an interview highlighting concerns about potentially overstimulating the economy.
In light of the ambitious goals set during Apollo's recent investor day to increase assets under management to $1.5 trillion in five years and achieve $10 billion in annual earnings, Rowan mentioned the possibility of forming additional partnerships with banks. This approach is similar to their existing collaboration with Citigroup for private credit investments, with plans for international and infrastructure-focused partnerships.
Rowan also highlighted the narrowing gap between public and private investment-grade debt, suggesting that investors will soon perceive them as equivalent. He projected that within 18 months, the differences would be indistinguishable, with private markets potentially absorbing more of the public market's offerings.
The CEO touched upon equity investments, pointing out that excessive concentration in a few large stocks could benefit from greater private investment, potentially boosting returns by 50%-60% in 401(k) portfolios. Additionally, Rowan cautioned against the current pace of government spending, warning that it risks burdening future generations financially.
