Scott Kleinman

Senior executive at Apollo Asset Management and expert on private markets and alternative investment strategies.

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Key positions and views

Public markets are structurally flawed due to high capital concentration in a few companies, making it nearly impossible for active managers to outperform.

The integrated model of combining private credit and private equity, powered by a large captive insurance balance sheet, is the superior structure for generating alpha by taking on complexity and illiquidity risk.

The $13 trillion U.S. 401k market represents the next great frontier for private assets and will be a primary driver of a 'vertical' increase in demand.

Product suitability for retail investors is paramount, leading to the decision not to offer a semi-liquid private equity product due to the inherent liquidity mismatch, which creates a poor long-term client experience.

The economy's extensive fueling by AI-related capital expenditures represents a significant, underappreciated market risk should the expected return on investment fail to materialize.

Podcast consensus on Kleinman

Points of consensus

▶Apollo's integrated model, combining private equity and private credit under one roof and powered by a large insurance balance sheet, is a core strategic advantage that allows the firm to generate excess returns by taking on complexity and illiquidity.Apr 2026

▶Apollo's investment philosophy is consistently described as value-oriented and contrarian, focused on capitalizing on market dislocations, such as buying distressed debt during the GFC or entering sectors after a significant repricing.Apr 2026

▶A massive, untapped opportunity exists for private assets within retail channels, particularly the $13 trillion U.S. 401k market, which is expected to drive a rapid increase in demand.Apr 2026

▶The firm's scale is a key differentiator, enabling it to provide bespoke financing solutions in sizes of $10 billion or even $20 billion, a capability few others possess.Apr 2026

Points of debate

▶Kleinman is critical of the high concentration of capital in public equity markets, yet he champions the growth of private markets, which could eventually face similar concentration issues as mega-firms like Apollo continue to scale.Apr 2026

▶He expresses strong caution about specific asset classes at certain times (e.g., zero real estate equity in 2021), but demonstrates a rapid tactical shift to aggressively re-enter those same markets (acquiring a $50B real estate manager) once pricing becomes favorable, suggesting a highly opportunistic rather than dogmatic view.Apr 2026

▶While identifying AI-related capital expenditure as a major underappreciated market risk, his firm operates in an environment that must invest in and be exposed to the outcomes of this very trend, creating a tension between his macroeconomic caution and portfolio reality.Apr 2026

▶He rejects semi-liquid private equity products for wealth clients due to a 'liquidity mismatch,' while simultaneously advocating for pushing private assets into the 401k market, which presents its own significant liquidity and structural challenges for retail participants.Apr 2026

Key themes

▶Apollo's Integrated Credit and Insurance EngineApr 2026

Kleinman consistently emphasizes Apollo's unique structure, which combines private equity and private credit, a strategy the firm pioneered after the Global Financial Crisis. This is supercharged by a $500 billion captive insurance balance sheet that provides long-duration capital, allowing the firm to take on complexity and illiquidity in investment-grade credit to generate excess returns.

This structure positions Apollo not just as a traditional asset manager but as a large-scale capital solutions provider, capable of deploying tens of billions in bespoke financing and effectively competing with or supplanting traditional banking functions.

▶Contrarian and Value-Oriented InvestingApr 2026

A core theme is Apollo's philosophy of being contrarian and value-focused. Kleinman highlights instances like buying tens of billions in distressed bank debt during the GFC, investing in a salt business carve-out at a low multiple, and avoiding real estate equity in 2021 only to re-enter after a market repricing.

Kleinman's narrative suggests Apollo's success is tied to its discipline in avoiding frothy markets and its patience in waiting for dislocations, a strategy that relies on cyclical opportunities to deploy capital at attractive valuations.

▶The Breakdown of Public Markets and Rise of Private SolutionsApr 2026

Kleinman argues that public equity markets are 'broken' due to extreme capital concentration and the persistent failure of active managers to outperform passive indices. He predicts the distinction between public and private will become less relevant, with risk categories, rather than liquidity, becoming the new defining feature of asset classes.

This viewpoint strategically reframes the investment landscape around Apollo's core strengths, positioning private markets as the necessary solution for sophisticated investors failed by traditional public market allocations.

▶The Coming 'Vertical' Demand for Private AssetsApr 2026

Kleinman identifies a massive, untapped demand for private assets from institutional investors, wealth clients, and particularly the $13 trillion U.S. 401k market. He predicts this demand will increase rapidly and potentially 'vertically' as these large capital pools begin to allocate to alternatives.

This forecast underpins Apollo's strategic focus on scaling its platform, but it also implies future risks of capital saturation and return compression if too much money chases a limited number of quality private deals.

Source episodes

Sentiment over time

Not enough data for timeline

Changes over time

c. 1991

Apollo Asset Management is founded out of the S&L crisis with a focus on providing capital to companies needing restructuring.

1994

Kleinman notes that private equity represented less than 0.5% of GDP, establishing a baseline for the industry's subsequent massive growth.

Post-GFC (c. 2009)

Apollo pioneers the strategy of operating private credit and private equity businesses under the same roof. The firm also acts opportunistically, purchasing tens of billions of dollars of bank debt at deeply discounted prices.

December 2021

Kleinman expresses a cautious market view, considering the 4.5% yield on the high-yield bond index an unattractive risk-return proposition. Around this time, Apollo holds zero real estate equity on its insurance balance sheet for similar reasons.

Present Day

After a market repricing, Apollo signals a renewed interest in real estate by acquiring Bridge, a $50 billion asset manager. The firm anticipates ending the year with approximately $1 trillion in assets under management.

Suggested prompts

How does Apollo's strategy of taking on complexity and illiquidity risk in its credit portfolio expose it to systemic risks not present in traditional asset management? &nearr;Kleinman identifies AI CapEx as a major market risk. How is Apollo positioning its own portfolio to either mitigate this risk or capitalize on potential dislocations if it materializes? &nearr;What are the operational and regulatory hurdles for integrating private assets into the $13 trillion 401k market, and is Apollo's rejection of semi-liquid PE products consistent with this ambition? &nearr;Given Kleinman's view that public markets are 'broken' due to concentration, how might Apollo's increasing scale and influence in private markets replicate the same concentration issues he criticizes? &nearr;

Key concepts

Apollo's Strategy 1 ep Private Credit 1 ep Insurance Business 1 ep Market Risk & Cycles 1 ep Private Equity 1 ep Public Markets 1 ep Real Estate Investing 1 ep Retail & 401k Opportunity 1 ep Deal Making & Scale 1 ep Future of Asset Management 1 ep

Notable quotes

“We have an economy right now that is being extensively fueled by AI CapEx. Valuations in the public equity markets are increasingly tied to a handful of companies that have gone very long. AI that have made multi-trillion dollars worth of commitments to continuing to invest in that. There's an expectation of ROI on that capital. If those ROIs don't come to pass, I don't think the whole system is going bankrupt, but that clearly will have a weighing effect on the markets.”

Scott Kleinman · Scott Kleinman – Apollo’s Integrated Alternatives Platform (EP.481)

“The demand for private assets is only going in one direction, and that direction may be pretty vertical pretty fast.”

Scott Kleinman · Scott Kleinman – Apollo’s Integrated Alternatives Platform (EP.481)

“We don't think it's a great product. So we have decided not to bring a semi-liquid private equity product. We have a variety of semi-liquid other products, but for private equity, we've made the decision, this isn't the right product.”

Scott Kleinman · Scott Kleinman – Apollo’s Integrated Alternatives Platform (EP.481)

“and because of our scale we're not showing up at 200 and 500 million at a time we can show up at three five ten twenty billion dollars at a clip and speak for that level of capital to be able to do that with big IG counterparties.”

Scott Kleinman · Scott Kleinman – Apollo’s Integrated Alternatives Platform (EP.481)

Report last updated: Apr 21, 2026

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