Marc Rowan on Private Markets, Software Repricing, and Capital Allocation

**Marc Rowan** (0:00)
Ten stocks right now in the US are nearly 50% of the S&P, and they're all levered to the same trend. The same thing is happening in the global fixed income market. And so if you're an investor and you're looking for diversification, there's no place to get it other than private markets. Great companies, Entropic, Open AI, SpaceX, Anderol, every one of those companies is private, multiple trillion dollars, and yet most investors have zero exposure to them.

**David Haber** (0:25)
Andreessen wrote this piece over a decade ago that software is eating the world, and that feels more true than ever as AI proliferates all parts of the economy.

**Marc Rowan** (0:32)
We operate under the assumption that every job is going to be replaced or enhanced. 2025 was just proof of concept that data centers and chips and energy were all needed. 2026, the market is starting to recognize that if this continues, everyone who is an investor is going to be.

**SPEAKER_3** (0:50)
In 1990, Marc Rowan walked out of Drexel with his belongings in a cardboard box. Within a year, Apollo was managing $6 billion.
What started as a distressed investing firm in the aftermath of a financial crisis, eventually became one of the world's largest alternative asset managers, spanning private credit, retirement services, and financing for some of the largest industrial and technology shifts underway today. Now another transition is happening. AI, robotics, energy infrastructure, and data centers are creating enormous new capital demands, forcing finance and technology to converge in ways that barely existed a decade ago. A16z's David Haber speaks with Marc Rowan about building Apollo, the evolution of private markets, and financing the next industrial era.

**David Haber** (1:40)
Marc, thank you so much for joining us and for hosting us here at your office.

**Marc Rowan** (1:43)
Nothing better. My absolute pleasure.

**David Haber** (1:45)
I thought we'd start by maybe going back in time. You joined Drexel coming on Warren, I believe in 1984 What did you see in the firm at that time?

**Marc Rowan** (1:53)
It was an interesting thing. Everyone who had come out of my program at Wharton had basically gone to Goldman Sachs.

**David Haber** (1:59)
Yep.

**Marc Rowan** (1:59)
And what struck me about Drexel's business, which was financing entrepreneurs, financing new companies, is that you didn't really need to know all that much about finance. You needed to know a lot about business. Because these companies were not the exons of the day or the top-notch companies of the day. They were companies where legitimately there were questions on the business model.
And I was always much more interested in business. Than I was in the nuances of finance and public offerings and things like that. And I was not disappointed. It was awesome.

**David Haber** (2:31)
Yeah, I mean, I think one of the most remarkable things about kind of the diaspora from Drexel, especially in that period, is just, I mean, you can almost trace every major credit firm back to that kind of cohort of people. Was there something about the culture, maybe the focus of your clients at the time, that sort of shaped that sort of incredible kind of diaspora talent?

**Marc Rowan** (2:49)
Look, this business-first mentality and really understanding the business is ultimately about making credit decisions.
These companies were not investment-grade, they were below investment-grade. It really forced you to understand the fundamentals of their business, not to rely on third parties. But also, a whole market was being created. There were no high-yield bonds, there were no Leford loans, there were no ETFs, there was no real securitized product. All the products that we take for granted today that exist did not exist. This forced you into clean sheet thinking.
The whole notion of PIC, I believe, was created in one afternoon solving a problem. The notion of silver backed or silver index bonds solving another problem and so on. The notion of a highly confident letter, the notion of bridge financing. All of these things were basically problem solution, problem solution and that mentality of understanding the business, understanding the credit, but also having clean sheet thinking is certainly what powers Apollo today.

**David Haber** (3:49)
I know Michael Milken has been a mentor for a long time. What are some of the most valuable lessons you've learned from him over the years?

**Marc Rowan** (3:56)
They're just innumerable, but the story I tell about Mike is, I was like a smart young guy. I had mastered my craft. I was well thought of, and so every time the market went sideways, I would get a call from Mike and Mike would say, could you come from New York to California? I would of course ask when, this was Monday, he'd be like, Tuesday. The immediacy of how you dealt with problems and the business first mentality was definitely a Mike-ism. I sat on the trading desk and at the end of every trading day, Mike would walk by my desk and I was supposed to have all the answers because Mike was doing a million things, I was just doing one thing and every day, he would ask me a question that I did not know the answer to.