Apollo Global Management, the private equity firm that went public last year, will focus less on traditional buyouts and more on its credit investment business in 2012, its co-founder said.
“Let’s be the new bank,” Marc Rowan, a senior managing director, said Thursday at the Citibank Financial Services Conference in New York. “Let’s simply fill the holes created by the destruction of the financial system. Let’s be the new securitization market. Let’s not do traditional buyouts.”
Mr. Rowan, who co-founded Apollo with Joshua Harris in 1990, said the firm can provide bank loans in the U.S. producing 6% to 8% returns and in Europe producing 7% to 10% returns.
“That is a great investment for a pension fund,” he said. “And if they want leverage, we can double that or we can triple that.”
Apollo agreed in December to buy Stone Tower Capital, adding $17 billion in credit assets and making capital markets its biggest business unit, with about $39 billion under management. Earnings from credit investments and real estate purchases tend to deliver more predictable profits than private equity.