Scott Kleinman, co-president of Apollo Global Management, highlighted the necessity for the private equity industry to create value through "old-fashioned" methods. Speaking at the IPEM Private Equity Conference in Paris, Kleinman emphasized that the fading era of expansion calls for a renewed focus on fundamental business improvements. This involves enhancing earnings, optimizing cost structures, and identifying new avenues for growth within portfolio companies.
Kleinman's remarks suggest a shift in strategy for private equity firms, moving away from relying on market expansion and readily available capital. The current environment, marked by rising capital costs, demands a more hands-on approach to managing investments. He previously noted in June 2026 that private equity "lost its way a little bit" during a period of easy money, and firms would need to "capitulate on valuations" given the normalization of borrowing costs.
He further indicated that legacy portfolio firms are grappling with valuation issues, impacting returns. While capital is available for exits, the valuations may not be favorable, leaving firms that paid high prices in a difficult position. This sentiment aligns with broader market trends where credit investors are preparing for a surge in buyout debt, with over $138 billion expected to hit US and European credit markets in the coming months, a volume unseen since 2007 in the US.
