Apollo Asset Management Co-President Jim Zelter Talks Markets
Jan 9, 2025
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Jim Zelter, Co-President of Apollo Asset Management, shares his expert insights on the investment landscape and economic climate. He highlights the benefits of investing in private credit over traditional equities. Jim also contrasts the resilience of U.S. markets with challenges in Europe, discussing political impacts like those from the Liz Truss administration. He examines partnerships between private capital and banking, emphasizing their importance amid a changing financial environment. Mergers and acquisitions are optimistic, yet the IPO market remains uncertain.
The U.S. economy is positioned as a premier investment opportunity due to strong growth and a dynamic private capital sector.
Partnerships between private capital and banks signal a significant evolution in capital markets, potentially affecting IPO trends and financing options.
Deep dives
The Strength of the U.S. Economy
The U.S. economy is highlighted as a leading opportunity for investment compared to other regions like the UK and continental Europe. With strong economic growth and the influx of global capital, the private capital sector plays a crucial role in supporting company expansion and the overall economic renaissance. This contrasts sharply with Europe's outdated financing system, which is seen as a hindrance to economic growth. The analysis suggests that the U.S. financial services sector's depth and breadth positions it well for long-term prosperity.
Private Capital's Role in Economic Growth
Private credit and capital are emphasized as the primary drivers of economic growth in the U.S., showcasing a significant shift over the last several years. Notably, Warren Buffett's investment approach illustrates this trend, as a large proportion of Berkshire Hathaway's assets are allocated to private companies rather than public equities. This trend reflects a broader movement where companies now have alternative financing options and are less reliant on public markets for capital. The ongoing transformation indicates that the landscape of investors and their strategies is evolving, favoring private over public investments.
Challenges and Opportunities in Capital Markets
The podcast discusses the trend of partnerships between private capital and banks, which are expected to evolve as they work together on significant financial deals. This collaboration signifies a shift in how capital markets operate, suggesting that traditional public offerings may decrease due to private companies having ample access to funding. The prevailing sentiment is that the IPO market could face challenges, with many companies choosing to remain private longer, benefitting from alternative capital structures. As these trends develop, the barriers between public and private markets are anticipated to blur, making the financial landscape more integrated and accessible.
Apollo Asset Management Co-President Jim Zelter gives his outlook on the investment landscape. He speaks with Bloomberg's Jonathan Ferro and Lisa Abramowicz.