Marc Rowan, CEO of Apollo Global Management, says the panic around private credit is misplaced and driven by misunderstanding.
In a new opinion piece, Rowan argues that most public debate about “private credit” mistakes a small, risky corner of the market for the entire industry. He points out that out of roughly 40 trillion dollars in global credit markets, about 38 trillion dollars is high quality, investment grade debt held by banks, insurers, and pension funds. Those assets fund long term projects such as energy infrastructure, data centers, and manufacturing.
The smaller 2 trillion dollar portion, below investment grade “leveraged lending”, is where most of the concern lies. But Rowan says even that is misunderstood. Many investors move into these loans by selling equities or junk bonds, effectively trading into safer parts of the capital structure.
Rowan outlined four common myths he believes are driving misplaced fear:
- “Private credit isn’t rated.” He says that most investment grade private credit is rated by major agencies or through internal bank models. At Apollo’s Athene insurance arm, about 97% of fixed income assets are investment grade.
- “Private credit is opaque.” Rowan argues it is actually more transparent than public bonds because private lenders have access to nonpublic financials, stronger covenants, and direct company contact—advantages that public bondholders lack.
- “Private credit doesn’t trade.” Apollo alone traded around 6 billion dollars of investment grade private credit this year, and new vehicles such as State Street’s ETF show that daily pricing is increasingly available.
- “Private credit is the next systemic risk.” Rowan rejects this idea, saying that after Dodd-Frank reforms, lending moved from highly leveraged banks to longer term investors like insurers. That shift, he argues, has dispersed risk rather than concentrated it.
His conclusion: private credit’s growth has strengthened the financial system, not endangered it. Banks, he adds, are healthier because more risk now sits with investors who can hold assets through market cycles.
Rowan pointed to insurance data showing that over the past decade, losses have been concentrated in public corporate credit and real estate, not private or securitized debt.
“Public or private,” Rowan said, “it all comes down to underwriting.”
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
