Episode summary
Scott Kleinman – Apollo’s Integrated Alternatives Platform (EP.481)
Capital Allocators with Ted Seides
· · Hosts: Ted Seides · Guests: Scott Kleinman
Summary
Scott Kleinman argues that Apollo’s evolution was driven less by capital availability than by finding better risk-adjusted ideas across the capital structure. He traces the firm from a 13-person distressed-investing boutique into a nearly $1 trillion platform, saying Apollo’s core philosophy remained the same: be value-oriented, seek excess return per unit of risk, and be willing to invest in equity, debt, or preferred securities when that is the best expression of the trade.
The GFC was the inflection point. Kleinman says Apollo realized private equity, private credit, and insurance could sit under one roof, and that the firm’s durable advantage was not just buying distressed assets but building origination capabilities in asset-backed finance and private investment-grade credit. He emphasizes that Apollo’s insurance liabilities created a long-duration balance sheet that could capture spread in bespoke ways others could not.
Kleinman also describes his shift from dealmaker to firm leader, arguing that scaling Apollo required better communication, stronger incentives, and a more explicit culture. He says the firm now thinks like an owner because roughly half of invested capital comes from its own balance sheet. Looking ahead, he expects demand for private assets to keep rising, while the key constraint will remain sourcing high-quality investments, not raising capital.
Key takeaways
- Kleinman says Apollo’s edge is finding excess return per unit of risk across debt and equity, not just doing buyouts.
- He argues the GFC revealed that private credit and private equity could be managed together as one integrated platform.
- Apollo’s insurance balance sheet created duration that let the firm generate spread in investment-grade and structured credit more effectively.
- Kleinman says origination, not capital formation, is now Apollo’s main growth constraint.
- He thinks private-asset demand will keep expanding, including from wealth channels and eventually 401(k)s.
Notable quotes
“we should have private credit business and a private equity business under the same roof”
“The biggest constraint on our growth was origination. The whole industry thinks in terms of capital formation”
“We are long-term greedy, not short-term greedy”
“The demand for private assets is only going in one direction and that direction may be pretty vertical pretty fast”
How the episode opens
As the whole financial system started coming unglued, banks wouldn't lend to other banks, the ability to obtain liquidity became problematic for companies, for banks, for other things. We were able to approach banks and buy tens of billions of bank debt at a time at deeply discounted prices. We started accumulating enormous amounts of corporate debt.
Not all of it was distressed. It was just the seller was freaking out. The markets were freaking out.
So, we're buying good paper at discounted prices. At that moment it became clear to us that the provision of capital to levered companies is the other side of the coin of providing equity in levered situations. Private credit and private equity were two sides of the same coin.
We were the first folks to come out of the GFC saying well we should have private credit business and a private equity business under the same roof. I'm Ted Sides and this is Capital Allocators. My guest on today's show is Scott Kleinman, the co-president of Apollo Asset Management.
Scott joined Apollo in 1996 as its 13th employee and has spent nearly three decades helping build the firm into nearly a trillion dollar alternative asset manager and retirement powerhouse. Our conversation traces Apollo's evolution from a valueoriented private equity boutique to an integrated platform investing across the capital structure at scale. We discuss the firm's core philosophy of excess return per unit of risk, its postGFC expansion into private credit and retirement services, and why origination and not capital has become the key constraint on its growth.
We also explore Scott's transition from dealmaker to firmwide leader, touching on culture, incentives, communication, and governance. We close with Scott's perspective on today's credit environment, the convergence of public and private markets, and the risks and opportunities shaping the next phase of alternative investing.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- integrated alternatives
- private credit
- retirement services
- origination constraint
- credit market outlook
Companies and tickers mentioned
- APO
- Apollo Asset Management
Watch the episode
Watch “Scott Kleinman – Apollo’s Integrated Alternatives Platform (EP.481)” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Capital Allocators with Ted Seides, this episode and its artwork belong to Ted Seides – Allocator and Asset Management Expert. Octagon is not affiliated with the show; this page is an independent summary.
