Private Markets, Software Repricing and Capital Allocation | Marc Rowan on a16z

2026-05-27 · Source: a16z · Field: Finance & Economics — Capital Markets & Investment Management, Corporate Strategy & Leadership, Artificial Intelligence & Machine Learning · Depth: Advanced, extended

Summary

Marc Rowan, CEO of Apollo, discusses the evolving financial landscape, emphasizing the growing importance of private markets for diversification amidst public market concentration. He highlights Apollo's transformation from a private equity firm to a \$1 trillion+ alternative asset manager, with 80% of its assets in investment-grade credit. Rowan details the firm's focus on retirement services and financing the "global industrial renaissance" driven by AI, which demands massive capital for data centers, chips, robotics, and next-gen manufacturing. He notes that AI's proliferation is repricing enterprise software, potentially leading to "disastrous" private equity returns in that sector, and advocates for democratizing private markets through daily estimated values and standardized data to serve individual investors and other capital sources beyond traditional funds.

Key takeaway

For investors seeking portfolio diversification and entrepreneurs building capital-intensive AI businesses, recognize that private markets are becoming the primary source of growth and financing. You should explore private credit and hybrid equity solutions to fund infrastructure like data centers and robotics, as traditional equity financing alone is inefficient and insufficient at scale. Be wary of overexposure to enterprise software, as AI is fundamentally repricing these assets, potentially impacting future returns.

Key insights

Private markets offer crucial diversification and capital for AI-driven industrial growth, challenging traditional public market dominance and enterprise software valuations.

Principles

• Accept change or change is visited upon you.
• Credit management differs from equity risk-taking.
• Moral leadership means doing right over easy.

Method

Democratize private markets by implementing daily estimated values, standardized information (QIPS/ICE IDs), data warehouses, and market-making for credit products to serve diverse investor types.

In practice

• Engage private capital early for capital-intensive AI ventures.
• Diversify investment portfolios beyond concentrated public markets.
• Re-evaluate enterprise software valuations due to AI's disruptive impact.

Topics

• Private Markets
• Alternative Asset Management
• AI Infrastructure Financing
• Credit Markets
• Enterprise Software Repricing
• Retirement Services

Best for: Executive, Investor, Entrepreneur

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Editorial summary, takeaway, and curation by AIssential. Original article published by a16z.