Maybe Apollo Global's 4:30 AM Meetings Not a Gimmick - Could Be Sign of Distress

 Snarky was the early-blogging influencer tone. And maybe I defaulted back into that, although that's so out-of-date and I am no longer an influencer (except an anonymous one on professional social networks). 

In a post on this blog I had sized up Apollo's 4:30 AM meetings and its parachuting in speakers who scare the bejesus out of employees as perhaps "gimmicky." Perhaps they were not. There could be real business reason for those unusual measures at this powerfhouse financial firm.

The Financial Times reports:

"Private equity groups including Platinum Equity, Clearlake Capital and Apollo Global are struggling with the hefty debt loads of their holdings, Moody’s said on Thursday ... Nearly a quarter of the Apollo-owned companies that Moody’s rates have defaulted since 2022."

In response, Apollo disputed the Moody's definition of "default" and indicated it was over-broad. Also, in after hours today Apollo's stock price went up a bit - to 138.01. That is near the 52-week high of 140.35 and significantly above the 52-week low of 77.11.

Among the reasons for this negative turn of events in PE groups had been the recent rapid increase in interest rates. That slashed the value of companies that had risen during the pandemic. The result had been a hit to the balance sheet of those companies which had been highly leveraged. 

Just like a rising tide lifts all ships, a turbulent tide can throw some ships off-course. Overall, will Apollo feel stress in its strategy because of what FT describes as heavy debt loads and defauts in some of its portfolio of companies? And will that stress impact the billings of those elite large law firms such as Paul Weiss and Latham which represent Apollo?

Recently at an investors' conference Apollo CEO Marc Rowan told investors he intends to double Apollo's assets in the next five years. Therefore, obviously leadership is optimistic.

Life is hard. Business is even more difficult these days. Get answers – and relief. Jane Genova is a results-driven intuitive coach, tarot reader and content-creator related to careers. Complimentary consultation (please text/phone 203-468-8579 or email janegenova374@gmail.com)