I thought we'd start by maybe going back in time. Um, you joined Drexel coming out of Wharton, I believe, in 1984. Um, what did you see in the firm at that time? You know, it was an interesting thing. Um, everyone who had come out of my program at Wharton had basically gone to Goldman Sachs. And what struck me about Drexel's business, which was financing entrepreneurs, financing new companies, is that you didn't really need to know all that much about finance. You needed to know a lot about business because these companies were not the Exxons of the day or the top-notch companies of the day. They were companies where legitimately there were questions on the business model. And I was always much more interested in business than I was in the nuances of finance and public offerings and things like that. And I was not disappointed. It was awesome.

Look, this business-first mentality and really understanding the business is ultimately about making credit decisions. These companies were not investment grade; they were below investment grade. It really forced you to understand the fundamentals of their business, not to rely on third parties, but also a whole market was being created. There were no high-yield bonds. There were no levered loans. There were no ETFs. There was no real securitized product. All the products that we take for granted today that exist did not exist. This forced you into clean sheet thinking. The whole notion of PIK, I believe, was created in one afternoon solving a problem. The notion of silver-backed or silver-indexed bonds solving another problem and so on and so on. The notion of a highly confident letter, the notion of bridge financing. All of these things were basically problem-solution, problem-solution. And that mentality of understanding the business, understanding the credit, but also having clean sheet thinking is certainly what powers Apollo today.

The thing that [Michael Milken] said is you either accept change or change is visited upon you. And we're certainly in that moment where you either accept change or change is going to be visited upon you.

I left my office on Friday. I came back in on Sunday and I left with all my belongings in a cardboard box and Drexel was out of business. A great lesson. Financial services firms die from one of two causes: Heart attacks or cancer. Heart attack is funding risk. If you lend long and borrow short, you have funding risk. We saw this in Bear Stearns. We saw this in Lehman Brothers. We've seen this again and again. I will tell you that formative lesson: We will never see that at Apollo. It is ingrained in our culture to understand this funding issue, this heart attack risk. And then the cancer risk, of course, is the addition of bad assets over a long period of time, which again we as a principal mentality firm do not allow to happen. We admit our mistakes. We move on. We take our losses. We don't double-down and triple-down and do these other things.

Fortunately, a group of us had been sharing office space... we received a cold call from the government bank of France, the Crédit Lyonnais... asking whether we would be interested in starting an M&A boutique... one of us said, "But this would be an awesome time to deploy capital." ...A few months later, we left with $800 million of the government of France's money... And by the end of the year, we had $6 billion... and we went on to become the largest profit center of the Crédit Lyonnais. Eventually, the bank... sells its most profitable investment, Apollo, to its largest client, François Pinault.

The firm today is a little bit over a trillion dollars in assets under management... 80% of the assets under management are credit, and the vast majority of that is investment grade. And the other 200 billion or 20% of it, half of it is what we call hybrid equity, partner-like equity, and half of it is traditional private equity in a fund structure. It's a totally different makeup of a business than people expect when they say, "Well, Apollo is a private equity firm." Well, actually, Apollo is mostly an investment grade credit firm.

The fundamental good is we are the largest provider of retirement income anywhere in the world. The second is we are the largest source of financing for this global industrial renaissance that is taking place. And finally, we are diversification for public markets. 10 stocks right now in the US are nearly 50% of the S&P and they're all levered to the same trend. So far that's been amazing, but we've levered most of the retirement system of the country to 10 stocks. If you're an investor and you're looking for diversification, there's no place to get it other than private markets. Private markets are 80% of the action going on in the world. Great companies—Anthropic, OpenAI, SpaceX, Cognition, Cursor—every one of those companies is private, multiple trillion dollars of value, and yet most investors have zero exposure to them.

Mark Andreessen wrote this piece over a decade ago that software's eating the world. And that feels more true than ever as AI proliferates all parts of the economy. And as a result, we're finding ourselves funding more capital intensive businesses in areas like defense and energy and robotics and manufacturing. Ultimately, most of these businesses will need to graduate at some point beyond venture equity.

The amount of money that's going to be put into data centers, into chips, into robotics, into manufacturing, into defense is, as I suggested, every dollar since the invention of fire. That is not going to be financed with equity entirely because that is not efficient and the scale of it is not achievable. It is going to have to be parceled out into various risks. So if I look at the drivers of our business for this year, it is data centers. It is massive amounts of chip financing. Things that are reusable, things that have hard asset value are being offloaded into the credit markets at the appropriate rate of return and at the appropriate risk rating. 2025 was just proof of concept that data centers and chips and energy were all needed. 2026, the market is starting to recognize that if this continues, 800 billion of capex from just four public companies this year, everyone who is an investor is going to be concentrated in certain names.

I personally expect the returns from private equity in the ground to be disastrous because so much of exposure is to enterprise software. 30% of the private equity industry over the past decade has been devoted to enterprise software. The price they paid reflected a future that did not have AI in it, and now there's AI in it. It means that the prospects of onselling it either to the public markets or to someone else are now simply reduced.

In some things that have a right answer—accounting, trade ops, a number of other applications—we are going to see replacement. On the other hand, in things that require judgment and knowhow, we're going to see augmentation or enhancement. I think we're going to see a little bit of blue-collar ascendancy and white-collar decline. And I think that's going to be a difficult spot for politics which has not operated with that notion historically. It's going to be a difficult thing for blue cities where much of this white-collar employment is focused.

What we were watching was not free speech. We were watching favorite speech, preferred speech. I believe that we should not support those things that violate fundamental moral principles. I saw it as an anti-American, anti-system issue. We've stuck with the same formula: We hire for merit adjusted for distance traveled. And distance traveled is not about your immutable characteristics. It is about you as an individual, not your class, not your group. Show me the individual who's had to overcome something and still achieved. That's who I want.

Apparently, that's controversial, by the way. But I think there was a resounding amount of positive feedback on moral leadership. It's one of the principles that we have at Apollo, which is we do right over easy. It was easy to have said "no carbon" or said nothing. It was hard to have said, "We're going to make it better, not worse, but if that includes financing hydrocarbons, we're going to finance hydrocarbons." We are the luckiest people in the world. It's now going not from success to success, but from success to significance.

The greatest amount of effort of any project we've done in the past year has been on culture. What makes Apollo Apollo? How do you keep a company that's been really successful hungry and playing to win? Most companies hit an arc and then they decline to mediocrity. We basically say: I fail quickly and fix it quickly. You do not get fired here for making a bad decision. You get fired here for not recognizing it or not owning it and not fixing it. We have a wall of shame. Every senior professional here has lost money for the firm. If you haven't, you're just not doing enough.

Clean sheet thinking. Let's ask the question of what the right answer is. Informality. Informality in terms of intellectual insubordination, which I contrast with real insubordination. An environment where the right answer wins, where we can treat each other as humans. The business ultimately runs on experience, and that only lasts if your partners stay with you for their entire career. How we deal with people in these moments that matter... it's really important. It actually is almost more impactful than anything else we do.