Capital Allocators – Inside the Institutional Investment Industry

Episode 481: Scott Kleinman – Apollo's Integrated Alternatives Platform

Host: Ted Seides
Guest: Scott Kleinman, Co-President, Apollo Asset Management
Release Date: January 19, 2026

Episode Overview

This episode features a deep-dive conversation between Ted Seides and Scott Kleinman, Co-President of Apollo Asset Management. Kleinman reflects on his nearly three-decade journey at Apollo, tracing the firm’s transformation from a specialized private equity boutique to a trillion-dollar integrated alternatives and retirement services platform. The discussion covers Apollo's investment philosophy, its post-GFC expansion into private credit and insurance, internal culture and leadership, how origination has outpaced capital as a growth constraint, the convergence of public and private markets, and the risks and opportunities defining the next era for alternative investments.

Key Themes and Discussion Points

1. Early Career and Apollo's Beginnings

(05:46-08:35)

• Kleinman’s Path to Apollo:

  • Graduated from Wharton, 1994; started at Smith Barney’s financial sponsors group.
  • Developed close ties with Apollo through repeat work on their deals.
  • Joined Apollo in January 1996 as the 13th employee—without knowledge of his compensation, trusting the culture and people.
  • Quote: "I liked the way Apollo approached investing. I liked the people. I like the creativity of what was going on there." (06:55 - Scott Kleinman)

• What Apollo Was Like in the Early Days:

  • Half a floor on 6th Avenue, sharing space with a travel agency.
  • Focused on “healing” companies post-S&L crisis—specializing in restructuring and off-the-run situations.

2. Sustained Investment Philosophy

(09:00-10:48)

• Value-Oriented and Contrarian Approach:

  • Core philosophy: “excess return per unit of risk,” value orientation, willingness to be contrarian, and flexibility to invest across the capital structure.
  • Not restricted to equity—could be debt, preferred, or other instruments.
  • Quote: "...if you have a view, be comfortable zagging and be prepared to invest up and down the capital structure." (09:24 - Scott Kleinman)

• Notable Early Deal: Compass Minerals (10:56-12:20)

  • Carve-out from IMC Global, mining and selling salt.
  • Example of identifying overlooked, stable businesses; bought at under 6x EV/EBITDA and achieved 5x return.

3. The GFC – Apollo’s Pivotal Evolution

(15:07-19:23)

• General Expansion:

  • 2008 GFC enabled Apollo to deploy fresh capital at low valuations and in distressed situations—shifted the arc of the firm.
  • Began accumulating massive bank and corporate debt at discounts.
  • Realization that private credit and private equity are “two sides of the same coin.”

  Quote: “We were the first folks to come out of the GFC saying, well, we should have private credit business and a private equity business under the same roof.” (08:54 & 17:07 - Scott Kleinman)

• Insurance Industry Entry:

  • Spotted weakness in "guaranteed products" (annuities) after low-rate environment punished insurers’ duration mismatches.
  • Apollo’s skill in spread lending fueled its growth in insurance-driven assets, now $500 billion.
  • Innovated by developing investment-grade, bespoke, less liquid, and complex origination to find excess returns.

4. Building Integrated Credit and Insurance Businesses

(19:23-26:37)

• Asset-Backed Lending:

  • Developed large platforms in fleet finance, railcar, aircraft, and trade finance—found excess spread by going where banks and public markets wouldn't.
  • Built out specialized origination and servicing capabilities.

• Private Investment Grade (IG):

  • Helped big blue-chip companies with flexible off-market structured financing, offering scale: sometimes $3–20 billion at a time.

  Quote: “…because of our scale, we're not showing up at 200 and 500 million at a time. We can show up at 3, 5, 10, $20 billion at a clip and speak for that level of capital.” (25:43 - Scott Kleinman)

5. Origination, Not Capital, Is the Growth Constraint

(26:45-29:38)

• The bottleneck isn't investor capital but finding attractive investment opportunities (“good ideas”).

• Apollo became its own largest client—half of assets are their own insurance capital, influencing which products they take to external investors.

• "Long-term greedy, not short-term greedy": avoid launching products unless they'd invest internal capital as well.

  Quote: “The real limiter is the good ideas. We have to keep expanding that footprint for the different categories of risk and return. How do we find the best ideas?” (27:15 - Scott Kleinman)

6. Leadership, Culture, and Incentives

(32:33-44:34)

• Kleinman’s reluctant shift from dealmaker to leader; elevated to co-president in 2018.

• Leadership ethos: lead from the front, never ask others to do what you wouldn't, and foster a culture of curiosity, respect, and open communication.

• Shifted Apollo from secretive, “close to the vest” private equity model to a transparent, communicative organization—driven in part by insurance regulatory scrutiny.

• Emphasis on authenticity in communication—admit mistakes; real improvement comes from learning from near misses and failures.

• Scaling excellence: as the firm grew (13 to 5,000+), challenged with propagating judgment, cultural fit, and the flywheel of mutual internal support.

• Incentives: bonuses tied to platform-wide success, Apollo stock as unifying currency, reinforcing collaboration over silos.

  Quote: "Most importantly, the reason this integrated platform works is because I spend 10% of my time helping you on your deal...That flywheel is what keeps us working." (43:19 - Scott Kleinman)

7. Reflections on Being a Public Company

(44:34-47:49)

• Apollo’s public status helped with alignment and as a governance tool, but limits large M&A due to cultural integration challenges.
• Tends to pursue targeted “tuck-in” acquisitions for specific skills, rather than full mergers with other large asset managers.

8. Competition, Market Structure, and the Future of Asset Management

(47:49-49:30)

• Less focus on direct competitors, more on where “the puck is going.”
• Sees public/private boundaries in asset management converging.
• Predicts a future where definitions of risk and liquidity become more nuanced and not simply public vs. private.

9. Credit and Market Cycle Views

(49:30-54:13)

• “Credit is credit”—performance will be about underwriting, not public vs. private labels.

• Notes we’re late in the cycle, but the US economy has remained resilient despite rate hikes.

• Apollo’s approach: defensive—less leverage, more high-rated assets, fewer aggressive loans.

  Quote: “The ultimate performance through the next cycle is going to be more determined Based on the quality of the underwriting than was this a private credit fund or a public credit fund.” (50:05 - Scott Kleinman)

• Will avoid chasing risk and would rather give capital back than degrade underwriting standards.

10. Equity Strategies and New Initiatives

(54:13-57:48)

• PE fund scalability is inherently limited compared to credit.
• Sees opportunity in the future to redefine “active management” by translating private equity’s playbook to diversified, lower-leverage, higher-liquidity equity strategies—though details are still “in the lab.”

11. Risks and Market Observations

(57:48-59:40)

• AI-driven capital expenditures are fueling much of current GDP growth and public market valuations—Kleinman sees potential for turbulence if projected AI ROI falls short.

  Quote: “If those ROIs don't come to pass, I don't think the whole system is going bankrupt. But that clearly will have a weighing effect on the markets.” (57:56 - Scott Kleinman)

• Skeptical about semi-liquid private equity products due to profound liquidity mismatches in underlying asset realizations—Apollo has decided not to offer such products despite industry trend.

  Quote: "...for private equity we've made the decision this isn't the right product. It's not going to give the client...a good experience in the long run." (61:08 - Scott Kleinman)

12. Institutional and Wealth Channel Trends

(62:07-63:08)

• Institutional LPs continue to increase allocations to private assets, though pacing may be constrained by slower realization cycles.
• Anticipates 401(k) and retail mutual funds will soon blend in private assets, driving even more demand.

13. Looking Forward

(63:15-64:28)

• Future success will hinge on differentiated origination of private assets, not just accumulating capital.
• Firms able to source bespoke, high-quality deals will thrive, while those dependent on mass-market products will see commoditization.

Notable Quotes

• On Apollo’s core philosophy:
  "Excess return per unit of risk… Be prepared to be contrarian if everybody's zigging, if you have a view, be comfortable zagging..." (09:22 - Scott Kleinman)

• On origination as a constraint:
  "The real limiter is the good ideas. We have to keep expanding that footprint for the different categories of risk and return." (27:15 - Scott Kleinman)

• On the shift to owning risk:
  "Now when I go to a third party investor... it's, I have a new idea that I'm investing in. Would you like to invest alongside me? That changes the whole dialogue." (28:20 - Scott Kleinman)

• On leadership style:
  “Never ask anyone to do anything you wouldn't do yourself. Demonstrate the type of behavior that you want your teams to have.” (34:11 - Scott Kleinman)

• On late-cycle credit market:
  "You have to say we are late cycle now... we've tried to be defensive for when this does roll over, but we're not seeing it yet." (52:48 - Scott Kleinman)

• On the risk of semi-liquid private equity:
  "Had there been a huge pool of investors in private equity semi liquid products and they wanted to start getting their money back or if we hit a downturn now and they want their money back, they're going to be stuck for a while. We don't think it's a great product...” (61:14 - Scott Kleinman)

Timestamps for Key Sections

• Early career and Apollo’s foundation: 05:40–08:35
• Private equity philosophy and first phase: 09:00–10:48
• Post-GFC transformation (private credit & insurance): 15:07–19:23
• Building the asset-backed and IG credit business: 20:19–26:37
• Origination bottleneck; Apollo’s skin-in-the-game: 26:45–29:38
• Role evolution and firm culture: 32:33–37:26
• Incentives and public company pros/cons: 42:29–47:49
• Strategy vs. competition, convergence trends: 47:49–49:30
• Macro and credit market cycle view: 49:30–54:13
• Equity platform strategy and innovation: 54:13–57:48
• AI-driven risks and PE liquidity mismatch: 57:48–62:07
• Institutional/wealth client trends: 62:07–64:28

Memorable Moments

• Transition from "boxing gloves" reputation to conscious culture-building and regulatory partnership.

  • Quote: "You can only do that for so much... we started evolving. Inside the tent, it was an amazing place to work... very collegial organization." (13:58 - Scott Kleinman)

• On humility and transparency:

  • "At Apollo, you historically didn't get in trouble for doing a bad deal. You got in trouble for not Talking about it 12, 18, 24 months before you hit the wall…" (39:17 - Scott Kleinman)

Final Reflections and Personal Anecdotes

(64:55–70:25)

• Kleinman discusses personal interests (hunting, a new appreciation for gun ownership debates).
• Shares best advice received—pick your battles, focus on what truly matters in life and management.
• On life outcomes: “For the most part, it’s turned out the way I expected it to. ...You just think about what you can be doing next.” (69:34 - Scott Kleinman)

Summary

This episode offers a transparent, in-depth exploration of Apollo’s unique growth story and investment approach under Scott Kleinman’s leadership. It’s a must-listen for industry professionals seeking to understand how leading alternatives firms are reshaping asset management, forging new paths between asset classes, and preparing for seismic market shifts in the years ahead.