"It's almost biblical. There is a time to reap and there's a time to sow," Leon Black, chairman and chief executive of Apollo Global Management declared to the Milken Institute's global conference in Los Angeles, alluding to that same Scriptural passage. "We are harvesting," he added pointedly.
That is, the private-equity giant is a net seller because things simply can't get much better. "We think it's a fabulous environment to be selling," he says, noting Apollo has sold about $13 billion in assets in the past 15 months. "We're selling everything that's not nailed down. And if we're not selling, we're refinancing."
That's because there has never been such a good time to borrow -- which is raising warning flags for Black. "The financing market is as good as we have ever seen it. It's back to 2007 levels. There is no institutional memory," he observed, referring to the peak of the last credit bubble.Black worked for Drexel Burnham Lambert, back in the bad ol' days. Black is bright and has a privileged view of the market for bank loans, especially for buyouts.
I don't think that everything literally should be sold, and he doesn't seem to be saying exactly that, but it's more of a seller's market than a buyer's market, and that it is a good time to tidy up a portfolio. Of course, for as long as the Fed chooses, cash will not be keeping up with inflation.
