Apollo CEO Rowan warns of market correction, slams rival insurers

Apollo Global Management CEO Marc Rowan warned investors on Wednesday that the giant asset management firm was bracing itself for a potential market downturn and slammed what he called “poor” practices by some rival insurers.

Current solid economic environment helping Apollo report The company’s big quarter, in which it reached $1 trillion in assets under management and record earnings on wages, masks the growing risk of what he calls “unconventional” shocks.

“Everything we see in front of us is actually pretty powerful,” Rowan said. But “in our view, the chances of off-field results are much higher.”

Rowan, who co-founded Apollo in 1990 and oversaw its transformation into an alternative asset and insurance giant, said he is now more concerned with the external factors that derailed the economy during his four decades on Wall Street.

His comments, which come at a time when the U.S. stock market is trading near record levels, add to concerns voiced by financial executives among them. JPMorgan Chase CEO Jamie Dimon.

Rowan said he puts the probability of an exogenous shock at somewhere between 30% and 35%, which is much higher than the normal level of risk.

According to Rowan, the convergence of forces could destabilize markets, including a “total geopolitical reset,” policies that could lead to inflation by restricting labor and trade, and a sweeping cycle of artificial intelligence that reshapes employment and economic growth.

“Whether intentional or not, almost everything we do has the potential to be inflationary,” Rowan said, an apparent reference to President Donald Trump’s tariffs and U.S. immigration policies.

“Restricting the supply of goods, restricting the supply of labor and the free movement of goods and labor – perhaps for good and valid reasons that should be done – all of that is inflationary in the short term, even if we don’t see signs of it,” he said.

Rowan predicted socioeconomic upheaval around AI: “Almost every job will be improved or replaced. We will see complete change; the rise of blue-collar work and the stress of white-collar work.”

He added that while companies’ and consumers’ balance sheets remain strong, governments’ finances are in dire straits.

While Apollo received strong results today, Rowan said it was preparing for more volatile times ahead.

The firm has improved the credit quality of its fixed-income investments, reduced its exposure to risky sectors such as software and stockpiled about $40 billion in cash in its insurance business.

“That means we’re investing from a perspective of preserving our capital and making sure that if there are corrections, we’re here to weather the cycles, which frankly we expect,” Rowan said.

But Rowan, who transformed Apollo in 2009 by expanding into insurance through annuity and retirement products vendor Athene, reserved his harshest words for other insurers. The insurance business provides Apollo with a large and stable pool of capital to invest; This is similar to the “surge” model popularized by insurance. Berkshire Hathawayand it is now at the center of its strategy.