Apollo's Kleinman Warns Private Equity Must Capitulate on Valuations
Apollo co-president Scott Kleinman said private equity firms will have to accept lower valuations as borrowing costs normalize after the easy-money era.
Apollo Global Management co-president Scott Kleinman warned that private equity firms will have to capitulate on valuations as the era of easy money ends and borrowing costs normalize. Speaking at a conference, Kleinman said the industry "lost its way a little bit" during the low-rate period and now faces a reckoning.
For stock market investors, this signals a potential wave of markdowns in private assets that could spill over into public markets. Many companies held by private equity may eventually be forced to accept lower sale prices or IPO valuations, which could pressure comparable publicly traded stocks in sectors like technology and healthcare. The shift also suggests that the buyout boom of recent years is unwinding, potentially reducing future M&A activity and affecting equity valuations broadly. NowPrice's real-time stock quotes allow traders to monitor how these dynamics impact listed companies in real time.
Looking ahead, market participants will watch for further commentary from private equity leaders and any actual transactions that confirm the valuation reset. The upcoming earnings season may also reveal how public companies are adjusting their own valuations in response to the changing cost of capital. Kleinman's remarks add to a growing chorus of voices predicting a correction in private market valuations, with implications for both private and public equity investors.