John Zito, co-President of Apollo Asset Management, said private credit is a safer investment during the current high-volatility market regime on Monday [1].
This perspective comes as artificial intelligence fundamentally alters the investing landscape, creating a volatile environment that Zito argues makes credit assets more resilient than other options.
Speaking at the Milken Institute Global Conference in Beverly Hills, Zito said to Bloomberg Television that the market has not fully recognized the stability of credit. "Everyone is acknowledging we will be in a higher-volatility regime, but they are not acknowledging credit is actually the typical safer place to be," Zito said [1].
Zito said that private credit remains the safer place for investors even as the rise of artificial intelligence is shifting the environment for the whole ecosystem of investing [1].
However, these assertions of stability contrast with recent investor behavior. An Apollo spokesperson said that investors have requested withdrawals equal to 11% of the firm's private-credit fund, which has prompted the company to limit redemptions [3].
Market analysis also suggests a gap between the perceived value and the market price of these assets. Reports indicate that Apollo's private-credit infrastructure currently trades at a 32% discount to fair value [4]. Some analysts have used this discount thesis to set a target price for Apollo's stock at $162.96 [4].
Despite the redemptions and valuation discounts, Zito said that the structural nature of credit provides a buffer against the shifts caused by AI-driven market swings [1].
“"Private credit is the safer place for investors to be even as the rise of artificial intelligence is dramatically shifting the environment."”
The tension between Zito's optimism and the 11% redemption rate suggests a disconnect between institutional leadership and investor sentiment. While Apollo argues that AI-driven volatility makes credit a structural hedge, the limiting of redemptions indicates a liquidity squeeze that may undermine the 'safe haven' narrative in the short term.
