Marc Rowan on Private Markets and Your Retirement

I was running my bookstore in 1990 when Drexel Burnham Lambert collapsed. I remember it mostly as background noise — a Wall Street firm going under while I was trying to figure out whether to reorder a slow-moving title or hold the cash for rent. The S&L crisis was closer to home: a friend's father lost a hardware business that year when his bank called a line of credit. That's what 1990 felt like from Main Street. Not a data point. A reckoning.

Marc Rowan lived a different version of that year. He was a 28-year-old investment banker at Drexel, and one Sunday he went into the office and left with his belongings in a cardboard box. The firm was gone. He has described what happened next as the founding of Apollo Global Management — though the precise timing of how quickly they accumulated their early assets under management is the kind of detail that gets polished in the retelling. What's on record is that by the early 1990s, Rowan and his partners had secured backing from the government bank of France, Credit Lyonnais, and built from there into what is now one of the largest alternative asset managers in the world, with over a trillion dollars under management.

Rowan sat down recently with David Haber on the a16z Show for a wide-ranging conversation about where private capital is going, what AI is doing to the investments already made, and what he thinks moral leadership actually requires. It's worth parsing for an audience that might not follow private credit but almost certainly has money touched by it.

What "Private Markets" Actually Means for Your Money

Most people hear "private equity" and picture a firm buying a company, cutting staff, and flipping it. That's a real thing that happens, but it's only about 10% of what Apollo does now. Rowan is emphatic on this: Apollo is, in his description, "mostly an investment grade credit firm." Eighty percent of its assets under management are credit, and most of that is investment grade — meaning loans and bonds issued by large, established companies like Intel, AT&T, and Meta, just through private channels instead of public markets.

Here's why that matters if you're not at a16z: pension funds need stable, income-producing assets to pay retirees. Endowments need the same. Your teacher's union pension, your state employee retirement fund, the hospital workers' IBEW plan — these funds have been hunting for yield for a decade in a low-interest-rate world, and many of them found it in private markets, including in private equity funds that invested heavily in enterprise software companies.

Rowan's observation about enterprise software should make anyone with that kind of pension exposure sit up. He said flatly that he expects "the returns from private equity in the ground to be disastrous" because so much capital — he estimates around 30% of private equity investment over the past decade, which he acknowledges is his read of the market rather than a certified industry figure — went into enterprise software at prices that assumed a future without serious AI competition. That future didn't arrive. A different one did.

This doesn't mean those companies are going bankrupt. It means the private equity firms that bought them can't sell them at the prices they hoped. They can't take them public at those valuations. The exit isn't there. For pension funds that invested in those PE funds expecting strong returns, the math gets uncomfortable. If you're 58 and your retirement depends partly on a public employee pension, it's worth asking your fund's trustees what their private equity exposure looks like and when those funds are expected to return capital.

The Wrong Account Problem

Rowan spent considerable time in the conversation explaining what he calls the "bucket problem" — the way institutions divide their investments into fixed categories that don't always match reality. It's more interesting than it sounds, and I'll try to give it the translation it deserves.

Think about a small business owner — say, a restaurant — who keeps all her money in a checking account because that's where she's always kept it. She knows she should probably have some of it in a higher-yield account, but it doesn't fit neatly into "operating funds" or "savings" in her mental model, so it just sits there earning nothing. The money is good. The category system is failing her.

Rowan's version of this is that there's a whole class of assets — private, relatively safe, investment-grade — that doesn't fit neatly into either the "public equities" bucket or the "alternatives" bucket that institutions use. It's too safe and too low-return for the alternatives category. It's not public, so it can't go in the public fixed income bucket. So it just... doesn't get bought. And because it doesn't get bought, the people originating it can charge a premium for the inconvenience of not fitting the system. That's where Apollo has been making money.

His argument is that the lines between public and private markets are going to keep blurring, and that Apollo is moving toward daily pricing on its private credit products — investment-grade suite by June 30 of this year and across the full credit business by September, according to his public statements, though those timelines should be verified against Apollo's formal filings. His logic: "I've never seen a market in the world where you have transparency and price discovery that is not ten times its size."

The AI Problem Nobody Wants to Say Out Loud

The enterprise software section of the conversation is where Rowan says something most people in his position won't say in public. The private equity industry has a significant problem. The companies it bought — workflow software, HR platforms, data management tools — are now competing with AI systems that can do similar things faster and cheaper. The PE firms paid prices that assumed steady subscription revenue growth and a clear path to a public offering or strategic sale. Those assumptions are now wrong for a lot of companies.

"The notion that we woke up eight to twelve weeks ago and figured out that AI was going to impact enterprise software," Rowan said, with a pointed pause. His implication was clear: responsible investors should have seen this earlier, and many didn't.

The collateral damage — to use lender language — flows downstream. Credit lenders who financed these buyouts are now holding paper on companies with weakened prospects. If the credit is problematic, as Rowan puts it, the equity is really problematic.

What replaces it, in his view, is the infrastructure wave: data centers, chip financing, energy transmission, robotics, defense manufacturing. These are capital-intensive businesses that can't be financed entirely with venture equity — the scale is too large and the assets are too tangible for equity alone. Rowan sees Apollo financing the physical layer of the AI economy the way banks once financed railroads.

On Rowan's Moral Leadership Positions

I'll be honest with you here, because careful neutrality on this section would be a disservice to readers who have their own views.

Rowan is a major donor who withdrew financial support from the University of Pennsylvania over his assessment of how university leadership handled events after October 7th, 2023. He framed this as fighting antisemitism and defending the principle that a university's job is academic excellence, not ideological advocacy. He also talked at length about his opposition to diversity, equity, and inclusion hiring frameworks, describing them as "anti-American," and articulated his own alternative: "merit adjusted for distance traveled" — meaning he wants to hire people who've overcome real obstacles as individuals, not as members of any group.

These positions didn't emerge in a vacuum. They reflect a specific set of values about institutions, merit, and who gets to define fairness. I find the "distance traveled" framing genuinely interesting as a hiring philosophy — it's closer to what I'd call economic mobility thinking than traditional meritocracy, and I've seen small business owners use something like it intuitively for years. The kid who worked two jobs and still got the degree. The person who built something from nothing.

Where I get more complicated is the campus politics part. When a billionaire withdraws funding from a university to influence leadership decisions, that's a form of leverage that most donors don't have. Rowan would say he was using the tools available to him, and that he was on the right side of a moral question. Plenty of my readers would agree with him about the campus climate questions and be less troubled by the method. Others would see a very powerful person using financial pressure to shape an educational institution according to his own judgment. Both reactions are honest reactions to what happened. I don't think either one is wrong for holding it.

What I'd push back on is the framing of this as a cost-free moral stance. Rowan acknowledged it wasn't cost-free. But the costs he absorbed are different in kind from the costs absorbed by people with less leverage who take public positions on contested questions. That asymmetry is worth naming.

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Rowan built Apollo out of a crisis that destroyed his previous employer, by seeing an opportunity in deploying capital when everyone else was frozen. That instinct — look at where the money isn't going and figure out why — has defined the firm across thirty-five years. The question his conversation raises for my readers is simpler and more personal: do you know where your retirement savings actually live? Not what account they're in. What they own. Because the line between "public and safe" and "private and risky" is moving, and it's worth knowing which side of it you're on before it moves past you.

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Dorothy "Dot" Williams covers small business and Main Street economics for Buzzrag.