Marc Rowan, CEO of Apollo Global Management, made some bold claims in a recent interview about the evolving landscape of private versus public markets. He argues that the distinction between the risks in public and private companies will soon diminish, driven by the rise of private credit and the shrinking role of traditional banks. With “de-banking” gaining momentum, private capital has taken on a significant portion of what used to sit on bank balance sheets, meaning that many of the traditional safety nets once associated with public markets are being replicated in private markets.
For finance professionals in the SADC region, this raises important questions about both investment strategy and regulatory frameworks. Rowan suggests that, in the near future, private markets will offer investment-grade opportunities once believed to be exclusive to public companies. This challenges the conventional mindset that public markets are inherently safer or more liquid. The shift suggests that up-and-coming finance professionals must adapt to a world where both markets are equally viable for risk-adjusted returns.
From an educational perspective, especially in the SADC region where there’s a focus on growing financial markets, Rowan’s points highlight a crucial need for curricula to emphasize alternative investments and private equity. As liquidity in public markets becomes more elusive and volatility more common, private markets may become an attractive route for long-term wealth creation, provided that upcoming professionals understand the complexities of private credit and the illiquidity premium.
Key questions finance professionals should ponder include:
- How will the regulatory environment in emerging markets like SADC respond to the shift toward private investments?
- What opportunities and risks should investors consider when public and private company risks converge?
- Are finance curriculums and training programs evolving fast enough to prepare the next generation for this seismic shift in investment strategy?
These reflections are important for both investors and young finance professionals in the SADC region, where adapting to these global trends could open new growth avenues, but also present unprecedented challenges.
What do you think—is the region ready for this shift, or are there more hurdles ahead?
#Finance #InvestmentStrategy #PrivateEquity #PublicMarkets #SADC
“The whole theory of portfolio allocation, where investors have invested in stocks and bonds, and this little bucket called alternatives, because it was risky and private, I believe is going to be rethought.”
Apollo CEO Marc Rowan spoke to CNBC about how the continued evolution of financial markets has created the need for a fundamental rethink of portfolio allocation strategies for all types of investors, as we expect the convergence of public and private markets and new product development to accelerate. Watch to learn more about his views on the investment strategies of tomorrow:
ACR Alpine Capital Research | Managing Director
2moThis clip of Marc Rowan on CNBC espousing a belief that the “evolution of financial markets has created the need for a fundamental rethink of portfolio allocation strategies for all types of investors” is receiving some attention. Mr. Rowan indicates that the varied practitioners that operate within the asset management industry need “to rethink how we allocate”. He points to his own 40 year career as an example: “All of us grew-up against a backdrop of things that we thought were certain and true. Perhaps they’re no longer true.” Mr. Rowan’s sentiments echo Howard Marks’ comparable observation of a “sea change”. The essential message of both men is that certain commonly accepted industry practices and assumptions that are uncritically considered conventional wisdom and consensus thinking may now, decades later, be in need of reconsideration and re-examination - with fresh perspectives and different approaches now worthy of acceptance, implementation and utilization.