At Extreme Investor Network, we have our finger on the pulse of the finance world to bring you the latest insights and expertise. Today, we’re diving into a special report featuring Apollo Asset Management Co-President Scott Kleinman and his contrarian call on interest rates.
In December 2023, while many were predicting rate cuts, Kleinman stood out with his bold prediction against any rate cuts in 2024. Fast forward to today, and his call has proven to be on point. However, the higher rates haven’t necessarily been a boon for the private equity industry, as they have led to increased financing costs.
According to a report from Bain & Co., the buyout deal count is down 4% globally compared to last year, leaving a staggering $1.1 trillion of dry powder waiting to be deployed. Despite this, Kleinman remains unfazed, stating that he is “very comfortable” with the current rates.
As a value-oriented investor, Kleinman believes that higher rates can actually lead to more disciplined valuations and present opportunities to invest in undervalued companies. While he acknowledges the possibility of a rate cut for political reasons, he stands firm on the data indicating that a rate cut may not be necessary.
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