From Neue Zürcher Zeitung's TheMarket.ch, June 11:
James Zelter expects a negative impact from higher rates for the private equity industry in the coming years. The President of Apollo Global Management sees opportunities in European credit markets and explains where Apollo wants to invest up to 100 bn. $ in Germany over the next decade.
Apollo Global Management is preparing for the next economic downturn by shunning riskier parts of credit markets, says James Zelter. The president of the S&P 500 company has led the expansion of the credit business of Apollo, which today manages more than 600 bn. $, before becoming President and the second highest executive at the firm after CEO Marc Rowan in January.
For private equity, where Apollo has invested a large part of its other more than 150 bn. $ of assets under management, Zelter is more cautious due to high prices paid in the zero interest rate era by some competitors and the high indebtedness of some of their portfolio companies.
Zelter sees the infrastructure and defense investment plans of the new German government as a large opportunity for the firm and its clients. Apollo is looking to deploy up to 100 bn. $ in Germany over the coming decades. In an interview at the sidelines of SuperReturn International 2025 conference in Berlin on June 4, he explained which areas are most attractive from Apollo's view.
Mr Zelter, what is the view on Europe when you discuss with your clients? Do you hear demands for more investment opportunities in Europe and especially in Germany?
I do. The demand to increase exposure is very strong from non-European investors, particularly in the US but also in the Middle East. We are a big player in Europe, we’ve been operating here for almost 25 years. We have more than 100 bn. $ invested across the continent. We’re excited by the domestic changes that are going on by the current administration of leadership in Germany. We are having a lot of very active dialogues about having Apollo be a partner in a variety of financing solutions, much more so on the funding and financing side than the equity side. We think it is a real turning point and opportunity set.The German infrastructure fund will have 500 bn. € to spend, spread out over ten years. Do you see opportunities to invest alongside that?
Very much so. When I think about the German economy today, it is a little bit above 4 tn. $ in size with aspirations to go to 6 tn. $ over the next decade. We feel that we can be a a major part of that and with the plan that has been put forth. We can see ourselves investing up to 100 bn. $ in Germany over the next decade across debt financing, investment grade and some portion of equity. We are a very active player today and want to expand that.Which subsectors or areas for investing to you find particularly interesting in Germany?
The whole area of energy transition, energy sustainability and energy transmission. A variety of areas in general industrial businesses. The revitalization of the defense industry. There is a variety of activities.Are you talking to any local partners about your investing plans?
Germany is fortunate to have a very large domestic Development Bank, the largest on the globe, with an AAA balance sheet and a variety of debt capacity opportunities. So we think we are well positioned and want to be part of this evolution. We have deep relationships with many of the largest banks and serve a large number of German corporates and sponsors.Where would you invest in the energy sector? In the electricity grid? In electricity generation, or rather storage? What is most attractive?....
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