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Marc Rowan - CEO of Apollo | Podcast | In Good Company | Norges Bank Investment Management
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Investors, finance professionals, and entrepreneurs interested in alternative asset management and the evolution of financial services.
TL;DR
Marc Rowan, co-founder of Apollo, discusses the firm's evolution from a small startup to a global alternative asset manager with over $700 billion in AUM. He highlights Apollo's dual focus on asset management and retirement services, emphasizing their expertise in originating investment-grade credit and providing long-term capital solutions.
Key Takeaways
- The perception of being 'too late' in finance is often inaccurate, as markets constantly evolve, creating new opportunities for those who adapt.
- Fundamental market changes, rather than just skill, have been the primary driver of Apollo's significant growth in assets under management.
- Founding a firm during a crisis, like Apollo's inception after Drexel Burnham Lambert's collapse, can be a powerful entrepreneurial motivator.
- Establishing a new financial services firm today is significantly more challenging, leading to a market structure favoring very large or very small players.
- Apollo's core business is the origination of credit, which is viewed as the lifeblood of their operations across various financial sectors.
- Apollo's Retirement Services business, focused on ensuring retirement income, has become the world's largest by capitalizing on the need for guaranteed income.
- The firm's strategy involves originating investment-grade credit with a spread, addressing the lack of alpha in public fixed income markets.
- Apollo is not replacing banks but rather complementing them by providing long-term capital for complex, long-term assets that don't fit traditional bank balance sheets.
In This Video
- 00:00Introduction to Apollo and its Shareholder
Nicola Tangin introduces Mark Rowan, co-founder of Apollo Global Management, and notes the Norwegian Sovereign Wealth Fund's significant ownership stake.
- 00:32Overcoming Early Doubts in Finance
Rowan reflects on his initial feeling of being 'too late' in finance, contrasting it with Apollo's massive growth and the evolving nature of the industry.
- 01:44Founding Apollo After Drexel's Collapse
The founding of Apollo in 1990 is discussed, motivated by unemployment and the opportunity for entrepreneurship during a financial crisis.
- 02:51Challenges of Starting a Firm Today
Rowan explains that establishing a new financial services firm today is significantly more difficult due to market structures favoring very large or very small entities.
- 03:17Apollo's Core Businesses: Credit and Retirement
Apollo's operations are described, focusing on credit origination and its substantial Retirement Services business, which insures retirement income.
- 06:10Investment Grade Credit as Apollo's Foundation
Investment grade credit origination is highlighted as central to Apollo's strategy, supporting both its asset management and insurance businesses.
- 06:46Apollo's Role Beyond Traditional Banking
Rowan clarifies Apollo's function, emphasizing its role in providing long-term capital for infrastructure and energy transition, complementing rather than replacing banks.
Questions & Answers
What is Apollo Global Management?
Apollo Global Management is one of the most influential alternative asset management firms in the world, co-founded by Marc Rowan.
How much has Apollo's AUM grown since 2008?
Apollo's Assets Under Management (AUM) grew from $40 billion in 2008 to over $700 billion in 13-14 years.
What motivated Marc Rowan to found Apollo?
The primary motivation for founding Apollo was being unemployed after Drexel Burnham Lambert went bankrupt in 1990, during a financial market collapse.
What are the two main businesses of Apollo?
Apollo operates as a Retirement Services insurance company and an asset manager, with a significant focus on credit origination.
Does Apollo replace banks in private credit?
Apollo is involved in private credit, but it's a small part of their business. They focus more on investment grade credit and long-term capital for complex projects.
What is the role of credit origination at Apollo?
Credit origination is the lifeblood of Apollo's business, involving the creation of senior secured private credit, similar to the old GE Capital model.
Key Terms
- Alternative Asset Management — Managing investments in assets outside of traditional stocks and bonds, such as private equity, hedge funds, and real estate.
- Assets Under Management (AUM) — The total market value of assets that a financial institution manages on behalf of its clients.
- Credit Origination — The process of creating and structuring loans or other forms of debt financing for businesses or projects.
- Investment Grade Fixed Income — Bonds or other debt instruments considered relatively safe, with a low risk of default, issued by financially stable entities.