Apollo CEO Says Inflation Is All Over Company Portfolio

The high inflation figures for the US economy are showing in all facets of the business of investment giant Apollo, CEO Marc Rowan said on Monday.

“Everywhere. There is no place [where we are not seeing it]. Everything we used to do now costs more, ”Rowan told CNBC’s Leslie Picker as part of“ Delivering Alpha ”. “Deadlines, pressure on stocks, pressure on supplies, pressure on employment. Our experience in our portfolio is really no different from that of 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 subsides and the natural pressures of low inflation in the United States, such as slow population growth, reassert themselves.

The price hike has been the subject of a key debate in economic and investment circles since the U.S. economy began to reopen restrictions related to the pandemic and consumer spending rebounded. Initially, the high inflation readings were caused in large part by dramatic increases in a few items, including used cars, and unusually low prices in the 2020 data which served as the main point of comparison.

However, inflation figures remained well above the Fed’s average 2% target, prompting economists and investors alike that the cost increases were not fading. The one-year median inflation expectation for consumers in August was 5.2%, according to a New York Fed report released on Monday.

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 the purchase of 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 wallet, but it’s his company’s job to thrive in any environment. He also said the markets appeared to be “priced for perfection” and threatened with setbacks, but that there are still places where investors can find value.

Rowan, who became CEO in March after co-founder Leon Black stepped down amid outcry over his ties to Jeffrey Epstein, also told Picker he had not seen the private equity arm of the The company will increase significantly in the years to come, with credit rather being a major axis of growth.

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