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Early in his profession, Marc Rowan, co-founder of Apollo International, frightened that he had missed the best windfalls in finance.
“I bear in mind getting out of enterprise faculty in 1984 and considering ‘God, I’m simply too late’,” Rowan as soon as mentioned of his early days as an affiliate at Drexel Burnham Lambert. “‘All the cash’s already been made.’”
The hard-charging funding financial institution led by “junk bond king” Michael Milken fuelled the Nineteen Eighties period of economic danger taking earlier than it spiralled out of business in 1990. However Rowan’s second to make severe cash would ultimately come nearly 20 years later. Shortly after the collapse of Lehman Brothers in September 2008, he delivered a speech to younger financiers wherein he declared: “You need chaos, you need every little thing shaken up, you need the system to be introduced down and rebuilt once more. This can be a time of unbelievable alternative.”
Rowan would go on to grab the prospect supplied by the banking disaster to re-engineer finance in response to his personal designs.
This week, the 62-year-old, who was born on Lengthy Island and educated on the College of Pennsylvania’s Wharton Faculty of Enterprise, outlined his plans for Apollo International, the sprawling New York-based funding group he oversees. We’re, he believes, on the cusp of a brand new age in Wall Road, wherein the facility of the banking trade is ebbing.
“US banks as we speak [represent] lower than 20 per cent of debt capital to US companies and customers,” Rowan has mentioned. Asset managers are changing them because the important cogs within the stream of credit score.
Placing Apollo, as soon as a small non-public partnership principally targeted on leveraged buyouts, on the centre of worldwide financing markets would cap a narrative that started greater than three a long time in the past when Drexel’s swift descent out of business prompted costs on low-rated bonds to plunge.
One distinguished sufferer of the funding financial institution’s collapse was an insurer referred to as Government Life that had soaked up “junk” money owed originated by Drexel. Along with colleagues from Drexel, Rowan, then jobless, persuaded the French financial institution Credit score Lyonnais to again a firesale takeover of the insurer, a manoeuvre that allowed them to revenue from a swift restoration within the money owed that they had bought to the group years earlier.
The deal was a monetary success and made a reputation for Rowan and his companions, together with billionaires Leon Black and Joshua Harris. However it might additionally result in scandal. Credit score Lyonnais was later charged with deceptive insurance coverage policyholders and regulators on features of the bid. A number of executives pleaded responsible to monetary crimes, however Rowan and his companions have been by no means implicated, and went on to create Apollo.
By means of the Nineteen Nineties and 2000s, Rowan oversaw a number of the agency’s greatest offers, together with the creation of ski resort operator Vail Resorts and Sirius Satellite tv for pc Radio, the place he personally courted and signed the notorious “shock jock” Howard Stern. He stored a a lot decrease profile than Black and Harris, preferring to domesticate a professorial picture along with his trademark sweaters and khakis. Associates say he would have been an architect if he hadn’t succeeded in finance. However his reticence didn’t forestall Apollo incomes a repute as essentially the most ruthless negotiator on Wall Road.
Within the aftermath of the 2008 disaster, Rowan turned his consideration to constructing an insurer for Apollo that he believed might change into another house for much less liquid money owed. With simply $16mn in fairness, he created Athene, an insurer that will create a gentle stream of premiums for Apollo to take a position.
Rowan spent a decade quietly increase Athene till 2020, when he was thrust into the highlight after particulars emerged of his companion Black’s shut ties to the late intercourse offender and financier Jeffrey Epstein. Rowan went on a “sabbatical” from Apollo, content material to remain within the background and concentrate on his insurer. When it grew to become clear Black would wish to depart, Rowan was tapped to change into Apollo’s sole chief upon his return.
Since then, Rowan has sought to guide Apollo away from its non-public fairness roots. It acquired Athene in early 2022 and the insurer, which now carries over $300bn in belongings, has change into key to Rowan’s imaginative and prescient for Apollo, which now presents itself as a one-stop financing choice for giant, extremely rated corporations, in addition to these of decrease credit score high quality. He has additionally sought to remake Apollo’s picture on Wall Road so it may possibly assault bigger markets, putting co-operative partnerships with banks corresponding to Citigroup and BNP Paribas.
“Behind the scenes, in his mental and artistic manner, he modified the enterprise mannequin of Apollo with out being entrance and centre,” says Richard Handler, chief government of funding financial institution Jefferies and a former colleague at Drexel. “He additionally added one other factor that displays who he’s: let’s deliver some humanity to the corporate and to our folks.”
Others take a extra suspicious view of this “friendlier” Apollo. “Apollo has lived in a world the place there are solely winners and losers, there is no such thing as a partnership the place all of us construct collectively and win,” says one monetary government. “Possibly it is a new day for them.”
Whereas Apollo portrays itself as a companion to incumbent banking giants, Rowan made clear on Tuesday that he believes a brand new order in finance is taking form.
“In each market, banks are being requested to do much less and buyers are being requested to do extra.”
