Apollo CEO Rowan Calls Private Credit Lenders Who Can't Meet 5% Redemptions 'Idiots'

Apollo Global Management (NYSE:APO) CEO Mark Rowan called private credit lenders who can't meet 5% redemptions "idiots" during CNBC's Invest In America forum.

• Where is APO stock headed?

"I'll say it frankly, you're an idiot. This is not that hard to do," Rowan said to CNBC's Sara Eisen. Rowan's remarks came as he argued that parts of the software market have been mispriced, while stressing that risk in private credit is not evenly distributed. 

Investors have been watching the private credit space closely amid worries that software-linked loans could be vulnerable if artificial intelligence reshapes business models faster than expected.

Last month, Apollo received redemption requests in its Apollo Debt Solutions BDC fund, equal to approximately 11.2%, or $750 million under the quarterly limit. 

The $40 Trillion Market Faces Disruption

The private credit market is estimated at about $40 trillion, with roughly $2 trillion tied to leveraged direct lending, the segment driving most of the current concerns, according to Rowan.

While spreads have widened, he noted that in many industries this shift will likely attract institutional investors, eventually bringing spreads back toward typical levels. 

However, he cautioned that enterprise software may be an exception, as ongoing risks tied to technological disruption, valuation shifts and AI-driven default pressures could persist.

Are Investors Ignorant Of Their Risks?

Rowan also aimed at investors who, in his view, failed to understand what they owned as concerns rose about enterprise software exposure in private credit. 

"We have a situation where investors do not actually know what they own. Maybe they should have known. If you discovered eight weeks ago that enterprise software was vulnerable to AI, you kinda weren't doing your job. This is knowable," Rowan said.

Why Mark Rowan's Words Matter Now

Approximately 12% of Apollo's loan book is tied to software, making it the largest single sector exposure inside that portfolio. Rowan noted that Apollo's scale makes the dollar amount manageable, pointing to the firm's broader credit footprint and retail assets.

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