Well, it's time for our daily Wall Street Week conversation, and today we're focusing on structural changes within the financial industry. Mark Owen he is Apollo Global Management co founder and CEO. He spoke with Wall Street Week host David Weston yesterday at the Milken Institute Global Conference in Los Angeles.
It is absolutely the driving force. I mean, this is focusing on the urgent, which is what we were talking about before we came on era versus the important. This is the important thing that's happening in our business. At our recent partners off site, I put up a slide that said, in two thousand and eight Apollo forty billion of AUM twenty twenty three, six hundred and fifty billion of AUM. We grew fourteen times. We outgrew Apple, we
outgrew Amazon, we outgrew Microsoft. Pretty impressive stat next slide where we lucky or smart? We were lucky. You can't possibly plan on growing your business fourteen times, but you can position the business in a way that you take advantage of powerful tailwinds or trends. What were the tailwinds? Two thousand and eight, we had a financial crisis which pushed most financial institutions in the Western world on defense. We built and formed a financial institution called Athene in
two thousand and eight. That company went from a startup to today three hundred and sixty billion dollars offense could never have been done but for the macro environment. The other thing that happened is rates went to zero. People who had made promises to retirees, to pensioners, and had other obligations that were fixed, all of a sudden needed to look elsewhere for rate of return. They were willing to consider that perhaps private markets offered an alternative. Okay,
those tailwinds powered us through two thousand and eight. Now I sit in twenty twenty four and I say, what are the tailwinds. This tailwind of dbanking, of having investors do more and banks do less absolutely happening and happening everywhere in the world. Does not mean banks will shrink. It just means on the margin, growth is going to come in the investment marketplace, in the banking marketplace. Second retirement. Unfortunately,
we're getting older. Every Western society is getting older. We as societies have done a terrible job with guaranteed lifetime income. Everyone will need more guaranteed lifetime income This is a fixed income product. It is powered by highly rated fixed income so called private investment, great big growth market. High net worth institutional investors used to be the dominant forces in our industry. We're at the very beginning of high
net worth investors exploring private markets. This is going to a trend that's going to take place for the next twenty years. And finally, indexation and commoditization of markets. If you're an active manager of equity, you failed to beat the market better than ninety percent of the time for twenty years. I don't think you got stupider. I think these firms are actually really good. But the structure of
markets changed. And this gets to the notion of if four thousand public companies is not enough for diversification, we have to find a way to participate in private markets. All four trends power not just to follow about our industry.
You mentioned pensioners retirees, and as you say, I certainly am getting older while volunteer for that is this part when we talk about pensioners or retirees, there's a big looming problem. Obviously, as people advancing age, they need retirement income is private. Part of the solution of that problem. Are you going to help us get out of this jam?
It's a part of the solution. So we have we have an actual experiment. We can look at Australia. Forty plus years ago, Australia adopted superannuation, which sounds like a fancy solution, but what is it. It literally just gave normal investors who needed returns access to private markets through supervised supervision, and Australia has been the most successful retiring retirement investment market anywhere in the world. What do we do in the US? Yes, we have to find benefit plans,
but defind benefit plans are shrinking, not growing. Most of our retirement money is in four oh one k twelve to thirteen trillion by some estimates. What are these people invested in? They're invested in daily liquid funds for fifty years. Why are they invested in daily liquid fund for fifty years?
I don't know.
Well, because public was safe and private was risky. It will not surprise me, and we're already seeing the beginnings of it. Retirees who are thinking in twenty and thirty and forty year timeframes having access to private markets. That doesn't mean private equity, That doesn't mean venture capital or hedge funds. That means the whole swath of the economy that is just not publicly listed.
So Mark, let me shift a different subject here. You started as a media banker.
I think unbelievable.
Hard to know. You talk about disruption. I mean, having spent some time in media, including on the business side, there's a huge disruption of media right now. Can you compare what we're seeing that shifts the fundamental shifts in media with what we're seeing in the move to private from public. Is it a similar sort of fundamental shifting of the ground under us I do.
I think there's a wholesale rewire if you think about where people used to spend their time in media and how they consume media. I joke with my kids, who are somewhat older this time, what do the numbers two, four, five, seven, nine, eleven and thirteen mean? They look at me like they must be prime numbers or something like that. I'm like, no, they're channels. That's how people used to consume me. We had a time, we watch something at a time. All bets are off, not only in terms of how media
is delivered, but how it's created. The easy which is created, and so on and so on. Financial services, we are going through that same sort of revolution in a much more regulated business, so it will not happen as fast. It is not just about public and private markets. It's about security, it's about who provides our services. We have a whole group of tech companies who are encroaching on the turf of the banking system. We have banks who are living in a more regulated paradigm but are nonetheless
the key gate keepers to services. So I look at our industry, what is our job and our job at Apollo our job is to match long term liabilities and long term assets to provide read to return to investors access return per unit of risk.
And that of course was Mark Rowan, Apollo Global Management co founder and CEO, and of course Wall Street Week host David Weston