Credit | Apollo Updates
April 25, 2024
Bolstering Resiliency in the US Financial System with Private Capital
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At a recent event with David Rubenstein at the Economic Club of Washington, D.C., Apollo CEO Marc Rowan discussed why we believe private credit, and the depth and diversity of its funding sources, promotes resiliency in the US financial system.
Marc Rowan: The US financial system is the single best financial system anywhere in the world. We're 50% of the world's financial system. Our businesses, our consumers benefit, our government benefits, we're the reserve currency, all of those things.
What percentage of our debt capital markets are now provided by banks? I'll tell you, less than 30. Somewhere between 20% and 30% of debt is provided by the banking system. The rest is provided by the investment marketplace.
When you have a dollar of debt in the banking system, it is levered 10 to 12 times. The moment it moves to a mutual fund, it's levered zero. The moment it moves to an institutional investor, it's levered zero. The moment it moves to a BDC, it's levered 1.5 times. The moment it moves to an insurance company, it's levered six to eight times. Every dollar that moves out of the banking system makes our system more resilient, not less resilient.
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