00:00I want to pick up on this headline from my friends over at the FT in the last month.
00:03Apollo's cutting risk and stockpiling cash.
00:06Is that true?
00:07What are you guys up to?
00:08Well, I would say that we've always been known as a disciplined investor.
00:12We talk about purchase price matters.
00:14We talk about alignment with our investors.
00:16And I think that what that statement is, it's really about the gauntlet for approving investments
00:22that Apollo has gotten higher and higher over the last year or so,
00:25as we see an environment that down the fairway, I'll use a golf analogy,
00:30down the fairway, you've got a lot of great things going on.
00:33Massive CapEx cycle, good economic growth, consumer in solid shape, a variety of great attributes.
00:40That being said, the rough, where there's lots of challenges between geopolitics,
00:46between the concern about inflation, between the concern about the return of invested capital and AI,
00:52there's a variety of left-tail items that have certainly grown in stature.
01:00You know, as I listen to some of the macro commentary here,
01:04I think there's a great deal of humility about the macro view of how the predictions,
01:09as I've said here many times, we sat here after SVB,
01:11we all thought massive capital slowdown in spending and credit crisis.
01:18The U.S. economy really was massively resilient.
01:21You guys talked earlier about what's going on with the deficit.
01:25I think it's a little bit, it's the economy stupid.
01:27The U.S. economy, people just don't want to short the great momentum of what's going on.
01:32And we have an administration that's very politically savvy about populist topics.
01:37He's been very responsive.
01:39But again, just back to us, back to the question you had, we're putting money to work.
01:43This week was a busy week.
01:44We announced $6 billion of deals of transactions, all great companies.
01:49Again, we're leaning into larger companies that are part of the global industrial renaissance.
01:54One with Brad Jacobs, a 40-, 35-year winner in the building product space.
02:00The second one with Russell Investments, really simplifying their capital structure.
02:04And then the last transaction was very interesting, actually.
02:07It was for Valor XAI, it was really a sale leaseback on a massive amount, $5 billion of NVIDIA chips.
02:17So all three really interesting transactions, but really well-structured downside risk.
02:22And I think that's our view right now.
02:24We want to be investing capital.
02:25But you've got to acknowledge you can wake up on a Saturday morning and see us with activities around the globe that really enhances the tail risk of geopolitics.
02:37You can get a stroke of the pen announcement yesterday with regard to housing.
02:41And so I think you have to be very, very careful about how you invest long-term at scale.
02:46To extend the analogy, though, to your point, the fairway is getting narrower.
02:50The rough is getting deeper.
02:51In the last few years, it's not been that way.
02:53Allocate to risk, and you'll perform.
02:54You'll do well.
02:55It feels like a tougher environment.
02:56The analogy for golf, for those who play a lot of golf, is we're at the U.S. Open.
03:00The U.S. Open is known for tight fairways and really punitive rough.
03:05And if you cape in the fairway, you're going to be a great victor and you're going to have great success.
03:10I think there's going to be, as last year will remind us, you can have some bumps in the road during the course of the year
03:16that definitely change the trajectory on liquidity, on momentum, on risk appetite.
03:21But I think the long-term trend is quite positive.
03:25But I do think you have to be very measured about how you execute your business model.
Comments