Apollo CEO: It’s Getting Harder to Beat Public Markets
Leon Black, the CEO of Apollo Global Management, recently spoke about the difficulty of outperforming public markets. He noted that the current environment is challenging for private equity firms, as the public markets have been on a tear.
The Rise of Public Markets
The public markets have been on a strong run since the start of 2020. The S&P 500 has gained more than 70% since then, and the Nasdaq Composite has gained more than 90%. This has been driven by a combination of strong economic growth, low interest rates, and a surge in technology stocks.
At the same time, private equity firms have been struggling to keep up. Private equity firms typically invest in companies that are not publicly traded, and they often take a longer-term view of their investments. This means that they are not able to take advantage of the short-term gains that the public markets have been experiencing.
Apollo’s Performance
Apollo has been one of the most successful private equity firms in recent years. The firm has generated strong returns for its investors, and it has been able to outperform the public markets.
However, Black noted that it is getting harder to beat the public markets. He said that the current environment is challenging for private equity firms, as the public markets have been on a tear.
The Challenges of Private Equity
Private equity firms face a number of challenges in the current environment. One of the biggest challenges is the lack of attractive investment opportunities. With the public markets on a strong run, there are fewer companies that are attractive to private equity firms.
In addition, private equity firms often take a longer-term view of their investments. This means that they are not able to take advantage of the short-term gains that the public markets have been experiencing.
The Benefits of Private Equity
Despite the challenges, Black noted that there are still benefits to investing in private equity. He said that private equity firms can provide investors with access to investments that are not available in the public markets.
In addition, private equity firms can provide investors with access to investments that are not correlated to the public markets. This means that investors can diversify their portfolios and reduce their risk.
The Future of Private Equity
Black believes that private equity will continue to be an attractive option for investors. He noted that private equity firms can provide investors with access to investments that are not available in the public markets, and they can provide investors with access to investments that are not correlated to the public markets.
At the same time, Black noted that private equity firms will need to adapt to the current environment. He said that private equity firms will need to be more selective in their investments, and they will need to focus on investments that have the potential to generate strong returns over the long term.
Conclusion
Leon Black, the CEO of Apollo Global Management, recently spoke about the difficulty of outperforming public markets. He noted that the current environment is challenging for private equity firms, as the public markets have been on a tear. Despite the challenges, Black believes that private equity will continue to be an attractive option for investors. He noted that private equity firms can provide investors with access to investments that are not available in the public markets, and they can provide investors with access to investments that are not correlated to the public markets. Private equity firms will need to be more selective in their investments, and they will need to focus on investments that have the potential to generate strong returns over the long term.