Apollo Co-President Scott Kleinman Talks Inflation
Nov 12, 2024
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Scott Kleinman, co-president at Apollo Global Management Inc., offers a keen perspective on the current financial landscape. He warns against complacency regarding inflation and interest rates. The discussion covers Apollo's ambitious plan to manage $1.5 trillion by 2029, providing insight into the complexities of private equity in a high-rate environment. Kleinman also highlights strategic partnerships and the keen need for innovative financing. On a personal note, he emphasizes the value of therapy for emotional well-being in the high-stakes finance world.
Scott Kleinman emphasizes the need for strategic investment in fixed income to achieve Apollo's ambitious $1.5 trillion AUM goal by 2029.
The evolving regulatory landscape and persistent inflation require private equity firms to adapt strategies to mitigate risks and capitalize on market opportunities.
Deep dives
Growth Strategy and Asset Management
The goal to double assets under management (AUM) to $1.5 trillion by 2029 highlights a strong growth strategy. Achieving this target relies on delivering high-quality investments that yield substantial returns, rather than merely accumulating capital. The focus is on identifying opportunities in the market, especially within fixed income, to enhance returns without incurring additional risks. This approach demonstrates a commitment to providing alpha to investors, which is essential for long-term business sustainability.
Market Dynamics and Regulatory Environment
The interplay between the economy and politics significantly influences market dynamics, particularly concerning growth and mergers and acquisitions (M&A). While there is cautious optimism about deregulation under the new administration, the fundamental health of the economy remains a critical driver of growth. Regulatory scrutiny is increasing, especially on private equity, but regulators are beginning to recognize that private capital does not necessarily elevate systemic risks. This shift in understanding may foster a more favorable environment for business expansion and investment.
Inflation and Future Economic Challenges
Concerns about persistent inflation shape economic outlooks, with indications that rates may remain elevated for longer than anticipated. Various factors contribute to this inflationary environment, including rising housing prices, supply chain constraints, and potential increases from new fiscal policies. The impact of earlier private equity investments at inflated prices further complicates the landscape, as firms face challenges in refinancing and selling portfolios. Strategic partnerships that address capital needs will be essential in navigating these economic hurdles and capitalizing on upcoming opportunities.
Scott Kleinman, co-president at Apollo Global Management Inc., has warned markets not to get too comfortable with the current trajectory of inflation and interest rates. He is joined by Bloomberg's Dani Burger.