Market Insight
October 18, 2024
Stephanie Drescher on CNBC
This interview originally aired on CNBC on October 10, 2024.
During a live interview on CNBC’s Closing Bell Overtime, Apollo's Chief Client and Product Development Officer Stephanie Drescher discussed the role of private market investments for individual investors.
Stephanie explained how an allocation to private markets can increase diversification, lower volatility and generate excess return. She also spoke to Apollo’s commitment to creating innovative solutions for individuals to access private markets—just as institutions have benefited from this exposure for decades. “There’s a huge opportunity ahead to provide that type of opportunity to individuals to build their wealth and save for retirement,” she said.
Footnotes
- 87% of firms with revenue greater than $100mm are private
- Source: S&P Capital IQ, Apollo Chief Economist. Note: For companies with last 12-month revenue greater then $100 million by count.
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For decades, conventional wisdom has held that private markets are too illiquid, risky and inflexible for defined contribution (DC) retirement plans. But many of these objections no longer hold water especially those focused on liquidity. Thanks to recent innovations in structure, strategy and oversight, the tools to manage liquidity within DC plans have evolved dramatically.
America is facing a widely recognized retirement crisis. Although retirement solutions providers have made important—and consistent—strides towards mitigating risks for retirees (from portfolio diversification to investment biases to longevity risk), key concerns remain.
As the US retirement landscape continues to evolve, the ongoing shift from defined benefit (DB) pensions to defined contribution (DC) plans continues to expose the critical gap in both retirement savings and strategy. The traditional portfolios powering today’s DC plans—typically centered around publicly traded equities and bonds—are showing signs of strain, especially in a world defined by heightened market volatility, concentration, compressed returns and growing longevity risk.
