Welcome back to yaho finances coverage Here at the milin conference in California lots of focus in these Halls On the outo for interest rates in the Economy joining me now as a very special Guest Apollo Global Management Co Mark Rowan good to see you again thank you Thanks for having me appreciate it so With did the the businesses that Apollo Owns what have you seen or what has the Impact been from hire for longer Interest rates very little very little Very little we you know the the way I go Through it is you think about what's Happening in the economy and what's Happening in the US 3 years ago we Decided to build infrastructure there's No infrastructure opened two years Semiconductor plants no semiconductor Plants opened a year ago inflation Reduction act none of those plants Opened we've been reshoring our supply Chain us has been the largest recipient Of foreign direct investment last three Years in a row something tells me we're Ramping defense production all of those Things are stimulative to employment and It does not surprise me everyone who Wants a job has a job which means it's Very hard to Dent the economy maybe Financial markets yes but the good the Underlying economy is strong So Soft Landing achieved you Think I think we've had a soft Landing
Um when rates have gone up 400 basis Points and the wheels haven't come off The buses they say uh I think that's the Definition of a soft Landing will it Continue I think so do high interest Rates even do they matter to a business Like Apollo look interest rates the Level of interest rates always matter um I'd say it it matters almost in Reverse I think investors kind of deceive Themselves that they were good investors For the past decade rather than riding An era of very low interest rates I mean Look at what's happened in real estate Look at what's happened in other in Sensitive Investments you thought we you Were the best investor in the world you Moved Austin Texas you bought all multif Family it was going great yeah the Changing cap rate has haved your Investment and now your 3 and a half% Mortgage is being refinanced at 72% you did everything right you just Didn't watch what was happening to rates I uh I'm an Avent listener of your Earnings call Mark so I will go back to The recent one and you talked a little Bit about Investors being levered to Nvidia apple and Amazon what do you Think the impact on markets have been Because of that being levered to those Stocks look we we are um in a liquidity Driven an interest rate driven a Sentiment driven market and you know I
Sometimes I ask particularly academics Do we even have price Discovery anymore In US markets it's not clear especially When you look at what a hard time active Management of equities here are people Who have spent their whole lives Becoming good investors and they as an Industry have failed to beat the market 93% of the time for 20 years did these People get stupider no but did the Structure of markets change so that we Have positive reinforcement of cyclical Flows into index funds and other forms Of passive investing I think we have Fundamental changes in Market structure That we have not dealt with as a society Yet So to the investors that are look I seen On Yahoo finance they love these stocks They love these companies what's your Advice to them is now the time to Rethink how you invest so look I'm I'm Not in the stock picking business but uh Very few people come in every day and Try to buy 45 or 50 PE stocks it's just Not what we do I look at the broader Trend we used to have 8,000 public Companies we now have 4,000 public Companies people think most of the Action is in public markets 80% of Companies over 100 million of Revenue And 80% of employment is in private Companies how do investors have exposure To private companies well the answer is
They don't institutional investors have It through a product private Equity but Most investors don't have any exposure To private markets we are just as an Investment World dipping our toe into Private credit so if you think of the Two big buckets that investors have debt And Equity debt is going first in debt There are things like rating a gencies That tell investors the level of quality Between public and the level of quality Between private and if investors can Earn higher returns and have better Diversification of private markets or by Adding private markets to a public Portfolio they'll do that it'll take Time and Equity but I I joke that not Only they may not own private equity and Funds but they will own Equity that is Private and it's our job as an industry To create products that allow investors To come into this Marketplace to get the Benefits of higher returns and Diversification I can't think of of Really anyone that could speak to this Better than you mark are we in a Retirement crisis and then how do we get Out of something like this look we we Are worldwide it's not just we in the US Everywhere in the world uh we have Western World at least we have aging Populations we have governments who are Doing less and we've had an era of very Low interest rates for the most part
People have not saved appropriately for Retirement how do we get out of it Slowly there's no magic bullet you look At places around the world where they've Done it amazing job take Australia super Annuation funds what what's been the Secret well the secret in part has been For savings on an annual basis matching From employers but a big part of the Return superannuation the design of it Was to give public investors access to Private markets under professional Supervision contrast that to what we're Doing in the US we have between 12 and13 Trillion in 401K plans what are these People invested in they don't know Well I'll tell you on the whole they're Invested in Daily liquid mutual funds And ETFs for 50 years why are they daily Liquid for 50 years I don't know we Haven't thought about it in a really Long time giving people access to the Totality of a Marketplace public and Private markets I do think is heading Our way I think for our industry not Just for Apollo this is a very bullish Thing we have built a whole industry out Of a very small bucket called Alternative We are branching out now and taking over Pieces of the fixed income bucket of our Large investors particularly the Investment grade private credit bucket It will not surprise me on the horizon
To also think about Equity across public And private markets and not just in Private Equity Fund format uh in the Couple minutes that we have left Mark I I have two just two final topics you're Really one of the first leaders to speak Out on anti-Semitism at College college Campuses and since then things have Really hit another level I think USA us SE campuses are closed today what's your Take or or read on the current situation And ultimately what's the end game with This look it's it's hard to give you the Endgame but uh I I say very tongue and- Cheek unfortunately the fight against Anti-Semitism is a growth Industry uh and that's what we're seeing Right now the protest we're seeing on College campus is are they anti-semitic They are absolutely anti-semitic are They anti-American they are Anti-American they're actually Anti-western we have we're thought of as These protests are leftist I used to Think of the left as liberal now the Left is illiberal where is this going I Think the vast majority of professors at These universities the vast majority of Students the vast majority of people in This country totally get that there is a Way and a right to protest people should Have free speech people should protest But there is also a way to take over to Cause damage to threaten and to
Intimidate and this is a failure of Leadership you look at place places like University of Florida University of Texas and vanderville where the leader Came out and said free speech Yes right To protest yes time and place Appropriate they don't have the problems That you have on other campuses where The leader was somewhat uh IL defined in Terms of the rights and the notion that We've been catering to a small group of People who hold extremist views they're Entitled to those extremist views what They're not entitled to is to impose Their will on the rest so I do think We're getting a little bit of uh snapb Back here where people are just tired of It I know a lot of people appreciate you Speaking out on this Mark and last but Not least and look I I understand you Can't talk a lot about any potential bid For for Paramount I get it but what is Where does a policy value in an asset Like that can you help us understand Like the thinking behind it look we we Are a purchase price matters value Oriented firm and the way value is Created today is usually in places that Are undergoing substantial change so Media as an industry I I don't have to Tell you uh sitting in Yahoo that media Is undergoing substantial change the Notion that you could come in and build On a a great business and try to
Navigate through these turbulent times I Think is where we create value we Historically have been long investors in Media we've done it across almost every Sector in media obviously right now we Are invested in Yahoo we are also Invested in legendary and by bringing Along an a respected industry partner Sony I think we look at this as just an Interesting opportunity to create value In an industry undergoing change we will Leave it there thank you for always Giving Yahoo and Yahoo finance time Mark Rowan Co of Apollo Global Management Good to see you again we appreciate it Total pleasure thanks
