Episode summary
Apollo's Jim Zelter on the Future of Private Credit
Exchanges (Goldman Sachs)
· · Guests: Jim Zelter
Summary
Jim Zelter argues that the market is underestimating both the breadth of private credit and the scale of the coming capital-spending cycle. He says private credit is not just direct lending, but a much larger financing ecosystem tied to commercial real estate, asset-based finance, and investment-grade needs, with Apollo raising nearly $150 billion from about 50 investment-grade companies in recent years.
He also says the next decade’s financing needs will be enormous, especially around AI data centers, energy transition, reshoring, and digital infrastructure. Zelter expects that traditional banks and public investment-grade issuance will not be enough, and that long-dated insurance capital will play a larger role in funding these projects. He points to Intel as an example of the kind of large, flexible, investment-grade financing Apollo wants to provide.
On risk, Zelter says a credit cycle will eventually arrive, but he does not think the market is on the cusp of a deep distressed episode like 2007/2009. He is more focused on the return on invested capital for AI and whether the biggest technology firms can earn enough to justify their massive capex. Across the conversation, he ties Apollo’s growth to culture, disciplined underwriting, and a global push into Europe and Japan.
Key takeaways
- Zelter says private credit is far broader than direct lending, and the market is missing the scale of the overall private financing opportunity.
- He says Apollo has raised almost $150 billion from about 50 investment-grade companies, showing demand from large corporate borrowers.
- Zelter expects a $5 to $6 trillion U.S. data-center funding need over the next five years, which he says banks alone cannot meet.
- He thinks a full credit cycle will come, but he does not expect a 2007/2009-style distressed reset.
- Zelter says the biggest risk investors may be underestimating is whether AI’s economic returns justify the huge capital being deployed.
- He says Apollo’s growth agenda is centered on fixed income replacement, retirement solutions, and public/private convergence.
Notable quotes
“I think the market is missing what it really is. I think you need to be a little bit of a historian”
“The reality is there's almost $40 trillion of private financing, commercial real estate, resy real estate, asset-based finance”
“if you look at the capital that's on paper required to fund just the data centers alone in the US, that's a $5 to $6 trillion capital need over the next five years”
“I think the return on invested capital of AI”
“We were one of the early movers on a lot of the big portfolios that the banks sold”
How the episode opens
Welcome to another episode of Goldman Sachs Exchanges: Great Investors. I'm Alison Mass, chairman of Investment Banking in Goldman Sachs's Global Banking & Markets business and your host for this episode. Today I have the pleasure of speaking with Jim Zelter, president of Apollo Global Management, one of the world's largest alternative asset managers and provider of retirement solutions.
We're talking with Jim at a truly dynamic time. The global economy is experiencing an unprecedented surge in capital expenditures driven by the growth in AI, data centers, the energy transition, and infrastructure needs, while an aging population is facing new retirement challenges. We'll talk to Jim about how he's strategically positioning Apollo to address the massive capital needs, his perspective on where risks are accumulating, and where he's seeing investment opportunities around the world.
So, Jim, welcome to Great Investors. It's a real pleasure to be here. So, I always like to start these sessions by asking what got people interested in business and finance in the first place.
You started your career on Wall Street as a trader in the public markets starting out as a fixed income trader and then working as a high yield trader here at Goldman Sachs. I did not have a typical finance background out of college. I did various jobs.
I worked in the fishing industry in Alaska. And as I got out of Duke, I came to New York and interviewed for a few jobs. And when I walked on a trading floor I just felt for the first time, like, this is the energy that I was looking for.
And so, it captivated me at a very early age. And I played sports. I played sports in college.
And I found the competition, the energy, the engagement, the intensity was something I just quickly cottoned to.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- private credit
- capital expenditures
- global investment opportunities
- private credit outlook
- ai capex
Companies and tickers mentioned
- Apollo Global Management
Watch the episode
Watch “Apollo's Jim Zelter on the Future of Private Credit” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from Exchanges (Goldman Sachs)
-
Playing for Scale: The Future of Sports Investing -
John Waldron on GDP Growth, AI, and the M&A Outlook -
Brookfield’s Connor Teskey on the Real Bottleneck in the AI Buildout -
Goldman Sachs Chairman and CEO David Solomon on AI: Implementation, Accountability, and Jobs -
Why Oil Prices Are Surging Despite Recovering Supply -
Where Chinese Exports Are Gaining the Most Market Share
Exchanges (Goldman Sachs), this episode and its artwork belong to Goldman Sachs. Octagon is not affiliated with the show; this page is an independent summary.
