"When rates are down and credit is free and liquidity is plentiful, everything moves up and to the right," Rowan told Yahoo Finance at the 2023 Milken Global Conference (video above). "So public equity markets, technology, [and] growth clearly succumbed to the siren song of liquidity. People now have to figure out were they good investors or was this all market beta?"
"Private equity was not immune to that," he added. "While it was happening, it felt really good, and now that it’s not happening anymore, it doesn’t feel so good...We did just fine over 10 years, but this is the period of time when liquidity has been withdrawn, when we’re playing offense and lots are playing defense." (Disclosure: Apollo Global Management is the parent company of Yahoo Finance.)
Apollo had $547.6 billion in assets under management (AUM) as 2022 came to a close, according to SEC filings. The company does business in private equity and private credit. It also owns retirement reinsurer Athene, which offers a range of annuity products and accounts for about 40% of Apollo's AUM.
Still, the alternative asset manager's portfolio continues to get a lot of attention from market watchers, and rightfully so given the high-profile names it holds.
In addition to the aforementioned Athene, an $11 billion all-stock acquisition it closed in 2022, Apollo currently owns security firm ADT, which it bought in 2016, and Yahoo Inc. (Yahoo Finance's parent company), which it acquired in 2021 for $5 billion.
In February, Apollo clocked a profit after three quarters of losses. However, it hasn't been immune to concerns in the broader economy. In March, Rowan reassured investors that Athene wasn't at risk of a run similar to those seen at regional banks in the aftermath of Silicon Valley Bank's collapse.
Private equity focused 'on getting good outcomes'
M&A was notably slow over the course of 2022, curtailed by the Fed's rising rates as well as economic and geopolitical volatility. And that trend has continued in 2023 so far.
Though 2023 won't be a year defined by "new toys," as Rowan said previously, Apollo has done a handful of big deals while moving others over the finish line.
In March, Apollo announced plans to acquire chemical company Univar Solutions for $8.1 billion in an all-cash transaction. Then in April, the firm invested $500 million in education tech company Cengage Group in a deal expected to close this summer. The company also closed its acquisition of Atlas Air Worldwide, a deal done alongside J.F. Lehman and Hill City Capital.
The firm has also been building up its presence in Europe. It opened a new office in London in April and invested 1 billion euros — about $1.1 billion — in real estate assets managed by Germany-based Vonovia.
Rowan, who co-founded the firm with Josh Harris and Leon Black in 1990, took the helm at Apollo in 2021. He said, fundamentally, the goal for Apollo is to think long-term about each of its businesses, especially private equity.
"We buy something; we operate the business as if we're going to own it forever," Rowan said. "If we make decisions as if we're going to own it forever, we usually will make the right decision. Whether we own it forever or not isn't the point."
"It is one of the real luxuries of our business to be able to think long-term and not care what happens on a quarterly basis," he continued.