Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Mark, thank you for
Speaker 1: doing this. Always a pleasure.
Speaker 2: I'm just saying outside that when I just looked back
Speaker 2: in twenty ten, you had around seventy billion in assets. Now,
Speaker 2: as we said, closing in on a trillion. Just should
Speaker 2: we start with kind of current affairs. You've got the
Speaker 2: conflict in Iran. I suppose we talk about the geopolitics,
Speaker 2: but on the basic question about what it's doing to
Speaker 2: the markets and the economy, how do you look at that?
Speaker 3: It's disruptive.
Speaker 4: I mean we've had this, you know, our refrain on
Speaker 4: this has been if you look at the numbers, things
Speaker 4: are great. Everyone has a job. The capital spending is
Speaker 4: off the charts and very conducive to future employment. Government
Speaker 4: policy is very accommodati. If capital markets are wide open,
Speaker 4: that's normally ninety five percent of what you need to
Speaker 4: worry about. But now, as we've been saying, it's only
Speaker 4: seven twy percent of what you need to worry about.
Speaker 4: The other thirty percent is geopolitics, it's government borrowing its
Speaker 4: excesses in capital markets, and it's technological change.
Speaker 3: None of this is unexpected. It's just here.
Speaker 2: How do you rate those I mean, do you worry
Speaker 2: about the Iraan things say more than that all the
Speaker 2: trade disruption.
Speaker 3: Personally not really mean.
Speaker 4: We always have an overreaction to the confrontation of problems.
Speaker 4: But this is a problem that needed to be dealt with,
Speaker 4: and if it were dealt with in other years, it
Speaker 4: would have been more difficult, and so the notion that
Speaker 4: it's being dealt with today in some ways is reassuring,
Speaker 4: notwithstanding the current instability.
Speaker 2: Just getting to that list of things you had, you
Speaker 2: had government borrowing. Is that something that worries you particular
Speaker 2: at the moment.
Speaker 4: It's not something to worry about, but it is something
Speaker 4: to watch. We have seen points in time when investors
Speaker 4: have called countries to account for their fiscal picture. We
Speaker 4: saw it most recently in the UK. It is trust,
Speaker 4: the departure of Liz Trust. And we have pretty much
Speaker 4: every government in the West spending more money than they
Speaker 4: are bringing in with no sign that they are letting up,
Speaker 4: and so there is nothing that says this will end soon.
Speaker 4: Japan did it for nearly three decades, and so it's
Speaker 4: just something to watch. Normally, that kind of borrowing is inflationary. Normally,
Speaker 4: the restriction of the free flow of goods is inflationary.
Speaker 4: Normally the restriction of the free flow of labor is inflationary,
Speaker 4: but we just haven't seen it. Having said that, if
Speaker 4: you're a credit investor wearing your credit hat, you don't
Speaker 4: get paid other than your coupon and your principle, you
Speaker 4: look at the surrounding facts.
Speaker 3: And you say, this has been a good time for
Speaker 3: risk off.
Speaker 2: Yesterday Jamie Dimond talked about inflation being the skunk at
Speaker 2: the party.
Speaker 1: Is that the way that you look at it, not
Speaker 1: so much as.
Speaker 3: The skunk at the party.
Speaker 4: But let's face it, we've had very accommodative capital markets,
Speaker 4: notwithstanding the backdrop that I've mentioned of things that can
Speaker 4: be inflationary. We've seen rates go down. We've actually seen
Speaker 4: curve steepening to the extent we saw a tick up
Speaker 4: in inflation that would probably handicap the fed'sibility to further
Speaker 4: push rates down.
Speaker 1: We just go into credit.
Speaker 2: You know, these big arguments, and it strikes me there's
Speaker 2: kind of two levels of it.
Speaker 1: The first question is do we.
Speaker 2: Think that there is more kind of laxness in the
Speaker 2: overall credit markets. That's what people Diamond talk about, Lloyd
Speaker 2: blank Mine talking and then there's a particular question of
Speaker 2: private credit. But just to look at those two, if
Speaker 2: I first look at credit as a whole, how worried
Speaker 2: you about that? I've seen you say that, actually the
Speaker 2: numbers aren't too bad, But how do you look at it?
Speaker 4: So I don't spend a lot of time worrying about it.
Speaker 4: We are companies are in pretty good shape. Consumers are
Speaker 4: in pretty good shape. This is not just in US.
Speaker 4: This is pretty much around the world ironically right now,
Speaker 4: it's governments that are not in good shape.
Speaker 3: Having said that.
Speaker 4: We're at the end potentially of a very long accombinative
Speaker 4: cycleing credit. And in every cycle you have people who
Speaker 4: move out on the risk curve, who ignore things that
Speaker 4: are obvious, and it all feels good while it's happening,
Speaker 4: and then it doesn't feel so good once it arrives. Well,
Speaker 4: some of those changes have arrived, I mean low and behold,
Speaker 4: we think that AI might impact software?
Speaker 3: Is that news?
Speaker 4: Did we just discover that two weeks ago? But apparently
Speaker 4: two weeks ago we discovered that AI is going to
Speaker 4: impact software, And we've been in a massive risk off mode,
Speaker 4: and so software stocks are down almost seventy percent I
Speaker 4: remind people that software first lean is senior to HYO
Speaker 4: bonds and is senior to equity. So if you're going
Speaker 4: to have a problem in software lending, you're going to
Speaker 4: have a problem in equity, You're going to have a
Speaker 4: problem in high yield, you're going to have a problem
Speaker 4: in bank lending and broadly syndicated and everywhere else. Because
Speaker 4: to your second point, credit is just credit. There are
Speaker 4: good underwriters of credit and there are bad underwriters of credit.
Speaker 2: Just on that point about tech is, as I read
Speaker 2: it from what you've said, you are you You were
Speaker 2: nervous about software before two weeks ago, on hand on
Speaker 2: never hand in terms when it comes to kind of
Speaker 2: digital infrastructure there you're still fairly you're less cautious.
Speaker 4: So I'd say I'm going to give you a more
Speaker 4: specific answer, because it doesn't it requires more specific answer.
Speaker 4: In our private equity portfolio, which is not the subject
Speaker 4: of this, we have zero software in our credit book
Speaker 4: across the totality of the firm.
Speaker 3: It's a fraction of assets.
Speaker 4: We run a broadly diversified credit book that is not
Speaker 4: concentrated in software. The problem with software is that it
Speaker 4: was thirty percent of the levered buyout market. Therefore it
Speaker 4: was thirty percent of the levered lending market, and therefore
Speaker 4: is just overrepresented and subject to attack. But we should
Speaker 4: not deny that change is coming, and change is not
Speaker 4: coming just in data centers and AI. As a world,
Speaker 4: we are building infrastructure, we're building energy, we're doing energy transmission,
Speaker 4: we're building next gen manufacturing, we're ramping defense, and we're
Speaker 4: doing this thing called AI and data. We're essentially spending
Speaker 4: every dollar since the creation of fire.
Speaker 3: And we're doing it all at once.
Speaker 4: And whatever we're doing in the US, they want to
Speaker 4: do in Europe and they're not as well prepared to it,
Speaker 4: and they're doing in the Middle East, and they're doing it.
Speaker 3: Elsewhere around the world.
Speaker 4: We will see the largest need for capital ever and
Speaker 4: that's what we've seen so far this year. And so
Speaker 4: now to your specific question, it's about underwriting. There are
Speaker 4: a number of very strong US tech companies who run
Speaker 4: diversified businesses Amazon, Google, Microsoft, who are interested in seeing
Speaker 4: these centers built and are interested in not consolidating the
Speaker 4: debt on their balance sheet, and to the extent they
Speaker 4: are prepared to lend their credit. One can lend against
Speaker 4: those types of things and make sensible underwriting decisions. There
Speaker 4: are those who are more equity story oriented, where it's
Speaker 4: maybe not as sensible or underwright, and good underwriters pick
Speaker 4: good credits and bad underwriters pick everyone.
Speaker 1: You and Ido have lived between us through a lot.
Speaker 2: I think we're almost identical ages Rob Stringtion, but we've
Speaker 2: lived through many iterations of credit coming and credit going.
Speaker 2: So when you talk about these individual decisions, like you know,
Speaker 2: is it good to be in digital infrastructure at the
Speaker 2: moment or not, that matters, But so does the overall
Speaker 2: picture and the one you just explained where you said
Speaker 2: there's all this money going into energy, going into AI,
Speaker 2: getting into all these different bits. Does the bill for
Speaker 2: that either end up with taxpayers or does it end
Speaker 2: up with banks and credit institutions.
Speaker 4: So, again, a longer answer than you probably want here,
Speaker 4: but the banking system is incredibly de levered and very diversified.
Speaker 4: I think it's in the best shape I've ever seen
Speaker 4: it in my forty two years of professional career. And
Speaker 4: then we get to the so called public and private markets.
Speaker 4: Private and public are just variations of the theme. The
Speaker 4: vast majority of the private market is investment grade. There's
Speaker 4: a forty trillion dollar market, and ninety nine percent of
Speaker 4: the headlines are focused on a little slice of a
Speaker 4: trillion and a half called levered lending. Levered lending is
Speaker 4: a below investment grade activity. If you trace the history
Speaker 4: of this. In two thousand and eight, levered lending was
Speaker 4: on bank balance sheets post GFC. Banks distributed this credit.
Speaker 4: On the one hand, you had the COLO market, which
Speaker 4: took credit off bank balance sheets, particularly less than investment
Speaker 4: grade credit, and distributed the risk to investment grade buyers
Speaker 4: on a senior basis and to below investment grade buyers
Speaker 4: how you'll buyers on a junior basis. Then it was
Speaker 4: also distributed to private market BDCs. Banks again supported them,
Speaker 4: but at a very safe tranch, and investors, private investors,
Speaker 4: retail investors, institutional investors came in to support private BDCs.
Speaker 4: And now we look at it and we say, well,
Speaker 4: credit is going through a cycle. Is that good or bad?
Speaker 4: And the answer is relative to what. And this is
Speaker 4: the point that people often miss. Credit is the formation
Speaker 4: of credit, particularly in these private BDCs, is a de
Speaker 4: risking activity for the economy and for individuals. It's de
Speaker 4: risking because it moved it off bank balance sheets and
Speaker 4: essentially democratized it throughout our economy. And it's de risking
Speaker 4: for individuals because people are not funding their investments in
Speaker 4: these BDCs with their treasury portfolio. They're selling their equities.
Speaker 4: Last I looked firstly in debt is senior to equity.
Speaker 4: They are making an intelligent decision that they can earn
Speaker 4: equity like returns without equity like risk and take money
Speaker 4: off the table.
Speaker 3: That does not guarantee success.
Speaker 1: You can have.
Speaker 4: If you own software stocks, you're really unhappy. If you
Speaker 4: own mostly software first lean, you're really unhappy. You're just
Speaker 4: less unhappy than if you own the equity. We can't
Speaker 4: legislate out of existence stupidity.
Speaker 2: But the underlying system you're arguing is safer because it's
Speaker 2: allocated in individual companies and it's not leaking back into
Speaker 2: the fully leveraged part of banks.
Speaker 4: And that's what in some ways we can say the
Speaker 4: post regulatory reform of the GFC worked. It's doing exactly
Speaker 4: what it was supposed to have do. It has socialized
Speaker 4: this risk, It has given investors another thing to invest in,
Speaker 4: which is actually de risking for them, and it has
Speaker 4: moved it out of the levered government guaranteed portion of
Speaker 4: our economy because we made a choice, and we've made
Speaker 4: a choice going back to the formation of Drexel below,
Speaker 4: investment grade companies have been a massive source of growth.
Speaker 4: Private companies have been a massive source of growth eighty
Speaker 4: percent of jobs. How are they financed? Well, they weren't
Speaker 4: really financed. They were cast out from the marketplace. If
Speaker 4: we want them to be financed, There's only two places
Speaker 4: they can get financed. One is the banking system, the
Speaker 4: second is the investment marketplace. If you're concerned about what's happening,
Speaker 4: you don't want it in your banking system. You prefer
Speaker 4: it in your investment marketplace where people can price the risk.
Speaker 1: So it's an extent. There are problems in private credit.
Speaker 2: You would argue it's a little bit more like that
Speaker 2: Dot Com problems of years ago, where it's really an
Speaker 2: equity play rather than a debt one. So there isn't
Speaker 2: that gelig nite of leverage going through things.
Speaker 4: Almost every investor is not a levered investor in the
Speaker 4: private credit ecosystem. But we've also we have this habit
Speaker 4: of throwing the baby out with the bathwater. All the
Speaker 4: press is focused on this levered lending portion of the market.
Speaker 4: As I sometimes remind my partners, as a deal shop,
Speaker 4: we don't get to be that big because although we're
Speaker 4: doing something from an efficiency point of view, we use
Speaker 4: up a lot of social capital. On the other hand,
Speaker 4: the vast majority of the market is private investment grade,
Speaker 4: which is also called private credit and has almost nothing
Speaker 4: to do with what we're talking about today.
Speaker 3: So I think I try.
Speaker 4: To be careful in using my language to make sure
Speaker 4: that we understand. Most of the capital going into private
Speaker 4: companies is actually going to finance this global industrial renaissance
Speaker 4: which is taking place around the world. A lesser amount
Speaker 4: of capital is going into the deal business, which is
Speaker 4: primarily being funded by investors or by institutions who are
Speaker 4: making a decision to sell their equity portfolio to invest
Speaker 4: in credit because they offer about the same rates of return.
Speaker 4: And by the way, we have ten companies that are
Speaker 4: forty percent of the SMP. We're not even a quote
Speaker 4: qualified market at this point. We're too concentrated.
Speaker 1: There is this issue. There isn't other private people.
Speaker 2: Consumers are trying to get involved in this, and you've
Speaker 2: pushed into kind of retail four oh one KSE things
Speaker 2: like that which you know they aren't investment grade, that's
Speaker 2: what they're looking at. Some people say that, you know,
Speaker 2: Apollo was a buccaneering shop. You know, it was all
Speaker 2: about taking being at the forefront. The more you get
Speaker 2: pushed back into these investment grade debts and stuff like that,
Speaker 2: or you might say, expanding into it, do you worry
Speaker 2: that limits the kind of risk appetite of the kind.
Speaker 1: Of people you want to bring in. I don't think so.
Speaker 4: I think what happened in our market if you go
Speaker 4: back again to the history, going to the eighties and
Speaker 4: the formation of Drexel. Drexel created the high yo bond market.
Speaker 4: It basically provided capital to these companies. So the banks
Speaker 4: responded with levered lending. All of the brain power in
Speaker 4: the financial marketplace left the investment grade market, and everyone
Speaker 4: wanted to do levered lending and high yo bonds because
Speaker 4: that's where the money was, that's where the excitement was,
Speaker 4: and it didn't come back into the market. The investment
Speaker 4: grade market is a drive by market with very low compensation,
Speaker 4: with very low creativity. What we've done, starting seventeen years ago,
Speaker 4: with the need to create investment grade for our captive
Speaker 4: insurance Carrier Athene and for others in the insurance market,
Speaker 4: was to put creativity and intelligence back in the investment
Speaker 4: grade market.
Speaker 3: No one is bored.
Speaker 4: I can tell you that this is not now a
Speaker 4: question of they're not no longer buccaneering, so they don't
Speaker 4: enjoy being there. The ability to be creative in the
Speaker 4: investment grade market is at a scale that's almost hard
Speaker 4: to imagine.
Speaker 1: So if you think.
Speaker 4: Last year we originated a little over three hundred billion
Speaker 4: dollars of new investments, mostly credit, eighty percent of that
Speaker 4: was investment grade, I assure you no one is complaining
Speaker 4: about the lack of buccaneering.
Speaker 1: But there is there is one.
Speaker 2: There's one good thing about what's happening out there is
Speaker 2: you could argue that finance has moved into private private markets.
Speaker 1: We have just a non bank.
Speaker 2: What's happening is consumers are now getting a chance to participate.
Speaker 2: But there is a kind of trade off, isn't there
Speaker 2: that there is? This is bringing them, this is giving
Speaker 2: them a ans to participate in these higher yielding areas
Speaker 2: which you've pioneered. But some people will say there is
Speaker 2: a degree of risk in that, and at some point
Speaker 2: that could cause problems.
Speaker 4: There's always a degree of risk. So I come back
Speaker 4: and no investment offers you a free lunch.
Speaker 3: There is no free launch.
Speaker 4: You can take equity risk, you can take credit risk,
Speaker 4: you can take duration risk, you can.
Speaker 3: Take all sorts of risks. The question is what's appropriate.
Speaker 4: But if you look around the world, every place that
Speaker 4: private assets have been added to public portfolios, you've gotten
Speaker 4: better outcomes. And if you go to the extreme and
Speaker 4: you take retirees, for instance, in four oh one k
Speaker 4: an extra percent compounded over the duration of how long
Speaker 4: you're going to be in there is a fifty to
Speaker 4: one hundred percent better outcome by having better investments. And
Speaker 4: what are they invested in today, Well, they're invested in
Speaker 4: daily liquid index funds for fifty years.
Speaker 3: Is that risk free?
Speaker 1: No?
Speaker 4: We have ten companies that dominate the SMP. We've essentially,
Speaker 4: as I sometimes show, we've levered the entirety of the
Speaker 4: retirement system of.
Speaker 3: The US to navidia. So far, that's been good.
Speaker 4: It's not always going to be good. Public is not
Speaker 4: safe or risky. Private is not safe or risky. They're
Speaker 4: both safe for risky, they're just different degrees of liquidity.
Speaker 2: I suppose It's this is that traditionally, this kind of
Speaker 2: slightly riskier on the face of it, lending has been
Speaker 2: outsourced to professionals like you and too, people who know
Speaker 2: what they're doing. The worry is that suddenly you're now
Speaker 2: getting in Bush and weekle On Tagata coming into these markets.
Speaker 1: We're more worrying.
Speaker 4: Look, we're going to have a correction, but it's no
Speaker 4: different than the correction that happening in banking. If you
Speaker 4: look in banking, the dominant banking institutions of today were
Speaker 4: not as dominant pre crisis. Those that sat out the
Speaker 4: subprime lending have arisen and become magnified in terms of
Speaker 4: their fortress, balance sheeted market share because they were good
Speaker 4: managers of risk, and good managers is of underriding. I
Speaker 4: believe the same thing is going to happen in investment markets.
Speaker 4: Investment markets made choices. If you wanted a higher dividend,
Speaker 4: you could take more risk, you could lend to smaller companies,
Speaker 4: you could do more pick, you can invest in equity
Speaker 4: and preferred not just first lean, and you could run
Speaker 4: with a lot of leverage. That felt really good on
Speaker 4: the way up. That's not going to feel so good
Speaker 4: on the way down. And there are companies of which
Speaker 4: we are one, but not the only one, who went
Speaker 4: all first lean, who went almost all cash pay, who
Speaker 4: went large companies, who worked with low leverage. I like
Speaker 4: where we sit, and Jamie Diamond said it. There's always
Speaker 4: going to be fraud, There's always going to be underwriting mistakes.
Speaker 4: But the question is who's a good risk manager and
Speaker 4: who's not a good risk manager. If thirty percent of
Speaker 4: your portfolio is in one industry and that one industry
Speaker 4: is being impacted by technology, you have not been a
Speaker 4: good risk manager.
Speaker 2: I think that I just looked at Blue Oul I
Speaker 2: think was seventy percent in different versions of tech. There
Speaker 2: is a parallel, though, isn't it. The way you described
Speaker 2: the banking industry, it has consolidated, particularly at the top.
Speaker 2: That would imply the industry you're in is going to
Speaker 2: consolidate as well, that you will end up with fewer people,
Speaker 2: because as you said, there is a reckoning coming. Some
Speaker 2: of those people will have to We have fewer people.
Speaker 4: I mean you started, I mean we were the whole,
Speaker 4: the entirety of the companies that you see that are
Speaker 4: public today. Everyone was forty billion in two thousand eight.
Speaker 4: We're now close to a trillion Blackstone more KKR.
Speaker 3: A little less.
Speaker 4: This is not good management, or not solely good management.
Speaker 4: This is a function of structural change in our marketplace,
Speaker 4: and that structural change is continuing, and the reward for
Speaker 4: good work is actually more work. In our case, it's
Speaker 4: managing more money. And I think that is where we're heading.
Speaker 4: I think this will be a shakeout. I don't think
Speaker 4: it is going to be short term. I think the
Speaker 4: thirty percent overhang of geopolitics, inflation, technological change is now here.
Speaker 4: It was foreseeable, not maybe exactly how it occurred, but
Speaker 4: it was foreseeable, it was predictable. And all you can
Speaker 4: do is have been a good run underwriter. Risk manager
Speaker 4: have done a small number of stupid things, and by
Speaker 4: the way, we've lived an environment of tight spread. If
Speaker 4: you were a good risk manager, you were going to
Speaker 4: make more money this year and next year if it continues,
Speaker 4: than you ever have before because you've been risk off.
Speaker 4: And so that's always the bifurcation of minds. First, you
Speaker 4: want to play defense and make sure in fact you've
Speaker 4: done what you think you have done, which has managed
Speaker 4: good risk.
Speaker 3: And then you want to play offense.
Speaker 2: Do you think, though you're going to end up with
Speaker 2: mega mergers in the bit, I mean that that's what
Speaker 2: happened in banks at some point.
Speaker 4: I don't think so, because I think that we are
Speaker 4: limited by two other factors. I think our business is
Speaker 4: not at the will not in the long term be
Speaker 4: limited by capital raising. It will be limited by our
Speaker 4: capacity to find good investments and by culture. So unlike
Speaker 4: a public asset manager who can buy anything any day,
Speaker 4: we can only grow as fast as we can originate
Speaker 4: good risk we actually create.
Speaker 3: And therefore, if we grow too fast, we.
Speaker 4: Start commoditizing our business because we're forced to take things
Speaker 4: we don't want. And so judging our industry should be
Speaker 4: judged by our capacity to originate good investments, not by
Speaker 4: our capacity to raise money. But the second piece of this,
Speaker 4: and they're directly related, is culture. We are, at the
Speaker 4: end of the day, an origination driven organization. Whether our
Speaker 4: peers say this or not, they are origination driven organizations.
Speaker 4: Often we're doing the first of everything. It's very hard
Speaker 4: to feed the first of everything into a model and
Speaker 4: get the right answer.
Speaker 3: We will be more efficient because it will not.
Speaker 4: We will not ignore us technology technological change, but the
Speaker 4: ability to attract the best people, have them want to
Speaker 4: come to work, have them spend their whole careers at
Speaker 4: Apollo is the primary job that I have.
Speaker 2: It strikes me if you look at all the things
Speaker 2: we've talked about. You're lending money, you're trading private credit assets.
Speaker 1: We just saw the headlight up there.
Speaker 2: You're building a kind of retail business. At some point
Speaker 2: you begin to look very like a bank, with the
Speaker 2: one exception that you're not taking deposits. Is is not
Speaker 2: really what it's coming down to in the end.
Speaker 3: Not really.
Speaker 4: I mean what you look at as a bank works
Speaker 4: with a government guarantee, they take deposits, they do maturity transformation,
Speaker 4: and they primarily make money from the capacity of their
Speaker 4: own balance sheet. We do two or three different things.
Speaker 4: One is we don't take deposits. We don't have a
Speaker 4: government guarantee, but we originated investments and we distribute them.
Speaker 4: And for a small portion of the investments generally, as
Speaker 4: I say, sometimes twenty five percent of everything, at one
Speaker 4: hundred percent of nothing, we keep on our balance sheet
Speaker 4: to match with our retirement obligations.
Speaker 2: Thanks to a lot of those sort of things, they
Speaker 2: will originate loans, and then distribute them. It's not that different.
Speaker 2: Take the comparison slightly differently for you. If you're a
Speaker 2: public asset manager, you come in every day and you
Speaker 2: make a decision to buy something, and then you distribute
Speaker 2: it amongst the accounts that you manage, and then you
Speaker 2: go home. We kind of do the same thing, except
Speaker 2: we don't get to buy something in the public market.
Speaker 2: We have to go find it in the private market.
Speaker 2: We structure it, we originate it, we distribute it amongst
Speaker 2: the accounts that we manage, and then we go home.
Speaker 3: And so.
Speaker 4: Everyone in the financial market, if you're not solely a trader,
Speaker 4: you're an investor.
Speaker 3: That's what we are at the end of the day.
Speaker 4: And in the broadest sense, if you think about the
Speaker 4: drivers of our business today, there are two drivers of
Speaker 4: our business. One global retirement crisis. Everywhere in the world
Speaker 4: we are short retirement income guaranteed lifetime income. Retirement income
Speaker 4: is a fixed income obligation. On the one hand, we
Speaker 4: need to produce retirement income. On the other hand, we
Speaker 4: have this global industrial renaissance primarily taking place investment grade companies,
Speaker 4: and we find ourselves in the middle.
Speaker 3: We originate risk.
Speaker 4: We put some of it on our insurance company balance sheet,
Speaker 4: and we distribute the rest to investors and source it
Speaker 4: for them without maturity, transformation, without government guarantees. And I
Speaker 4: believe we are playing a more important and a different
Speaker 4: role than most people perceive. And it's not just Apollo.
Speaker 4: This is the private market firms who have gotten to
Speaker 4: be sized. You don't get to be sizable in the
Speaker 4: deal business. The deal business can only get so big.
Speaker 4: You have to serve some fundamental public good otherwise you
Speaker 4: don't get.
Speaker 1: To be big.
Speaker 2: You talked about culture, and as you know, Apollo is
Speaker 2: being drawn into the Epstein thing because your fellow founder,
Speaker 2: Leon Black, who left in twenty twenty one.
Speaker 1: As part of it.
Speaker 2: Polo's done an investigation, said everything was to do with him,
Speaker 2: And I'm sure this eats up and lots of your time.
Speaker 2: Just as a general question for you, well, a strange
Speaker 2: one if we look back at that whole period because
Speaker 2: of individual meetings and things. When you look back now
Speaker 2: looking to what would you have done differently other than
Speaker 2: perhaps not having had Leon as a partner.
Speaker 4: Look, Leon made his own decisions and will I will
Speaker 4: not do that. But the answer is nothing. This is
Speaker 4: whether through good, good judgment, or good fortune. This is
Speaker 4: not someone I built a personal or business relationship with.
Speaker 3: It's not someone that Apollo did business with.
Speaker 4: If a relationship is, you know, one meeting over twenty
Speaker 4: years and a couple of unreturned emails, then that's a relationship.
Speaker 4: But other than he was Leon's tax advisor. We ran
Speaker 4: a tax We ran a partnership, not a company. Back then,
Speaker 4: Leon's tax position was relevant to my tax position. Other
Speaker 4: than that, I'm very sorry and didn't see what Jeff
Speaker 4: was doing me. I didn't like him for my own reasons.
Speaker 4: He wasted my time and.
Speaker 2: Now but now it does occupy time and questions as well.
Speaker 3: Even from the grave, he's wasting my time.
Speaker 1: Maroon, thank you very very much for talking to us.
Speaker 3: Thank you, thank you for having me.
Speaker 1: Thank you