Apollo CEO says inflation is everywhere in the company’s portfolio

The high inflation readings of the US economy are shown in all facets of the business to invest the giant Apollo, CEO Marc Rowan said on Monday.

“Everywhere. There is no place [where we are not seeing it]. “Everything we used to do now costs more,” Rowan told CNBC’s Leslie Picker as part of “Delivering Alpha. Our experience in our portfolio really isn’t any different from the broader economy.”

Rowan said it remains to be seen whether inflation proves to be transient (i.e., temporary), as Federal Reserve Chairman Jerome Powell has repeatedly said. Still, Rowan believes price increases will slow as the recent rise in spending slows and natural low-inflation U.S. pressures, such as slow population growth, are reaffirmed.

Rising prices have been the subject of key debate in economic and investment circles since the U.S. economy began to open up from pandemic restrictions and consumer spending rebounded. Originally, high inflation readings were caused, in large part, by the dramatic increases in some items, including used cars, and by the abnormally cheap prices of the 2020 data that were used as the main point of comparison.

However, inflation readings have remained well above the Fed’s average 2% target, prompting some concern among economists and investors that cost increases will not fade. According to a New York Fed report released Monday, August expected an average one-year inflation ahead of consumer expectations for 5.2%.

Apollo is one of the most important players in the alternative investment industry, with assets under management of $ 472 billion as of June 30. The company’s recent major operations include the purchase of Yahoo and AOL from Verizon for $ 5 billion. Apollo shares have risen about 25% to date.

Rowan said he wasn’t sure if Apollo could find a way to control inflation in his portfolio, but that his company’s work would thrive in any environment. He also said the markets seemed to have a “price of perfection” and were at risk of retreating, but that there are still places where investors can find value.

Rowan, who became CEO in March after co-founder Leon Black stepped aside amid riots over his ties to Jeffrey Epstein, also told Picker he did not see the company’s private equity arm grow. significantly in the coming years; an important area of ​​growth.

CNBC’s full Delivering Alpha conference will take place virtually on September 29, with speakers such as Brad Gerstner of Altimeter Capital and Chamath Palihapitiya of Social Capital. Interested investors can register for the event here.