Apollo CEO Says Inflation Is All Over Company Portfolio

Apollo CEO Says Inflation Is All Over Company Portfolio

Mark Rowan, co-founder and CEO of Apollo Global Management LLC, speaks at the Milken Institute’s Annual Global Conference Tuesday, April 29, 2014 in Beverly Hills, California, United States.

Patrick T. Fallon | Bloomberg | Getty Images

CEO Mark Rowan said on Monday that the high inflation rates for the US economy are reflected in all aspects of the business of investment giant Apollo.

“Everywhere. There is no place [where we are not seeing it]. “Whatever we used to do now costs more,” Rowan told CNBC’s Leslie Picker as part of “Delivering Alpha.” ‚ÄúDeadlines, pressure on stocks, pressure on supply, pressure on employment. Our experience in our portfolio is really no different from the economy at large. “

Rowan said it remains to be seen whether inflation turns out to be transient – that is, temporary – as Federal Reserve Chairman Jerome Powell has repeatedly said. Still, Rowan believes price increases will subside as the recent spending boom has abated and America’s natural low-inflation pressures, such as slowing population growth, recover. .

Since the U.S. economy recovered from the restrictions associated with the pandemic and consumer spending resumed, rising prices have been the subject of significant debate in business and investment circles. Basically, the higher inflation readings were due in large part to dramatic increases in certain items, including used cars, and unusually low prices in the 2020 numbers that were used as the main points of comparison.

However, inflation figures have remained well above the Fed’s average 2% target, prompting economists and investors alike that the increase in costs will not go away. According to a report released Monday by the New York Fed, consumer inflation expectations for a year ahead were 5.2% in August.

Apollo is one of the largest players in the alternative investment industry, with assets under management of $ 472 billion as of June 30. The company’s recent major deals include buying Yahoo and AOL from Verizon for $ 5 billion. Apollo shares have risen about 25% year-to-date.

Rowan said he’s not sure Apollo can find a way to control inflation in his portfolio, but it’s his company’s job to thrive in any environment. He also noted that the market appears to be “valued to perfection” and is in danger of retreating, but there is still room for investors to find value.

Rowan, who became CEO in March amid an outcry from co-founder Leon Black over his relationship with Jeffrey Epstein, also told Picker he has seen the company’s private equity arm grow significantly over the years. future. Instead, a major focus of development with credit.

CNBC’s Plenary Delivering Alpha conference will take place around September 29, with speakers including Brad Gerstner of Altimeter Capital and Chamath Palihapitiya of Social Capital. Interested investors can register for the event here.

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