Apollo’s Kleinman Says Private Equity Lost Its Way on Deals (2)

Private equity “lost its way a little bit” during the easy-money era and firms will “have to start capitulating for sure on valuations” after borrowing costs normalized, warned Scott Kleinman,co-president of Apollo Global Management Inc.

Some managers will now have to raise smaller funds or “go away” after mistiming investments, he said while speaking generally during an interview with Bloomberg Television on Wednesday. Funds raised from 2017 to 2022 in particular are struggling after paying high prices for deals, which in turn has hit internal rates of return, an industry measure of profitability, Kleinman said.

Private market managers ...